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By Staff Reporters
http://www.MARCINKOASSOCIATES.com
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From 2020 to 2021, when VC money was cheap and tech IPOs were hot, the tech companies that went public via IPO were mostly growth-focused unicorns that had yet to see any profits. But Instacart, which has turned a profit for the last five quarters, is something different.
Chip design company Arm, which debuted last week in the year’s biggest IPO, was the first venture-capital-backed startup to go public in the US since December 2021. It may have broken the ice, but Instacart is the next big test.
However, being profitable and being valuable aren’t the same thing. In 2020, investors valued Instacart at $39 billion, its highest valuation and roughly $29 billion more than what it’s expected to be worth to investors today.
- Late-stage investors in Instacart, such as Fidelity and T. Rowe Price, stand to lose 40% or more.
- Sequoia Capital—Instacart’s largest external shareholder—was also one of its earliest. Its initial $8 million investment in 2013 is worth $1 billion today, but its later investment of $50 million in 2021 has shrunk to $12 million.
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Filed under: "Ask-an-Advisor", Financial Planning, Funding Basics, Investing, Touring with Marcinko | Tagged: Arm, Initial Public Offering, instacart, IPO, Marcinko Associates, VC, Venture Capital |
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