(Reuters) -Instacart on Monday set a target of up to $7.73 billion valuation in its hotly anticipated U.S. initial public offering, more than 80% cheaper than the price tag it had fetched in its last funding round.
The company, along with some investors looking to cut their stake, is aiming to raise up to $616 million by offering 22 million shares priced between $26 and $28 each, it said in a regulatory filing.
In an unusual move, cornerstone investors have agreed to buy up to $400 million worth of shares sold in the offering, which would account for nearly two-thirds of the total proceeds at the top end of the price range.
Such investors include Norges Bank Investment Management, a division of Norges Bank, and entities affiliated with venture capital firms TCV, Sequoia Capital, D1 Capital Partners and Valiant Capital Management. Sequoia and D1 Capital are current backers of Instacart.
San Francisco-based Instacart was valued at $39 billion after its last funding round more than two years ago, when easy money helped several startups reach sky-high valuations.
As the Federal Reserve raised borrowing costs to tame inflation, many high-flying startups have had to raise funds at lower valuations.
Instacart too has had to cut its internal valuation to as low as $10 billion in December in its long walk toward a Nasdaq debut.
It is expected to list in September, almost three years after Reuters reported that the company had picked Goldman Sachs to lay the groundwork for an IPO.
Instacart would join SoftBank's chip designer Arm and marketing automation firm Klaviyo, which are also gearing up for market debuts in September.
If successful, the listings could nurture a nascent recovery in the U.S. IPO market amid growing expectations of a pause in rate hikes by the Fed.
The rush toward market debuts follows a lull in new listings for a major part of the last two years following Russia's invasion of Ukraine and a surge in borrowing costs.
Instacart filed for the IPO as "Maplebear," the name under which it is incorporated. Its shares are expected to trade on the Nasdaq under the symbol "CART."
PepsiCo has agreed to buy $175 million in preferred convertible stock, Instacart said adding that common stock investors will see an immediate dilution of their ownership interest after the offering.
Goldman Sachs and J.P.Morgan are the lead underwriters.
(Reporting by Niket Nishant and Manya Saini in Bengaluru; Editing by Arun Koyyur)
