The new IPO story is lowered expectations

The IPO window is finally open, but companies are proceeding through it cautiously.

Driving the news: Grocery delivery company Instacart and marketing automation software provider Klaviyo both launched their IPO roadshows on Monday, but are expecting to be valued below their most recent venture capital rounds.

By the numbers: Instacart said it plans to offer 22 million shares at between $26 and $28 per share.

• At the high end, that would work out to a $9.3 billion fully diluted valuation, compared to $39 billion in its last private round in early 2021, and even below a recent internal valuation reset to $13 billion.
• Klaviyo plans to offer 19.2 million shares at $25 to $27 per share. The top end fully diluted valuation would be below $9 billion, compared to its $9.5 billion valuation when last raising VC funding in July 2022.

What to know: Instacart is the bigger name, but the potential IPO pipeline has a lot more companies that look like Klaviyo, in terms of being based on a SaaS business model.

The bottom line: Both companies may be pricing for a pop, which often generates a virtuous headline cycle. And the very fact they're going public at all suggests confidence that public market investors are finally ready to ride some private "unicorns," even if at a lower altitude than previously expected.