Instacart had a reasonably successful first day of trading Tuesday, rising as high as $42 per share and closing at $33.70, 12% above its $30 IPO price. Many of its investors, however, would have been better off just putting their money in an S&P 500 index fund.
Why it matters: Instacart raised $660 million yesterday at a valuation of $9.9 billion. That's down sharply from its previous round, when it raised $265 million in March 2021 at $125 per share — a valuation of $39 billion.
Between the lines: At Tuesday's closing price, anybody who bought into Instacart in any of the the past three funding rounds is still underwater on their investment.
- Investors in the monster $897 million Series F round that closed in December 2018 are up on their $29.74 purchase price — but are significantly underperforming the stock market as a whole.
- You need to go all the way back to the $220 million Series C round in January 2015 to find a group of investors that significantly outperformed the market.
The bottom line: This is far from being the IPO that many of Instacart's venture investors were dreaming of.
Go deeper: The new IPO story is lowered expectations