Instacart, equity, and the reopening of the IPO market

The IPO window appears to be reopening, having almost completely shut down for the last 18 months. Instacart, the popular grocery delivery platform, made headlines at the end of August with its announcement of a long-anticipated initial public offering (IPO), signaling a significant development in the evolving IPO market.

Instacart employees have experienced significant ups and downs over the last few years as the company’s valuation was slashed from $39b to $24b and finally to $13b. For Instacart staff receiving ISOs, NSOs, and RSUs, the fluctuating valuation has generated additional questions about the actual value of their equity. But now, with profitability, steady growth, and a booming advertising business, Instacart appears poised for a successful IPO. This leaves Instacart employees challenged to navigate their equity decisions through the unexplored 2023 landscape. For those looking to develop a strategy, I recently shared an in-depth article on developing a sales plan for RSUs.

The IPO could also have far-reaching implications for the IPO market, as it serves as a litmus test for investor sentiment toward privately held tech companies. Instacart’s decision to go public now could well become a bellwether for others, such as Reddit, Discord, and Stripe, whose plans to go public were cut short by the impact of inflation, rising interest rates, slowing post-pandemic growth, and the upheaval in financial markets brought by worries of recession.

A successful Instacart IPO may encourage other tech unicorns to expedite their plans, while a lackluster reception could make others more cautious. Overall, Instacart's foray into the public markets represents a pivotal moment in the IPO landscape, offering a glimpse into the market's mood and potential trends that could shape the future of IPOs over the remainder of 2023.

If you’re an Instacart employee looking for help navigating your equity and taxes, we’re here to help. We look forward to connecting.