Is the IPO market really opening up? Many companies may be unwilling to accept lower valuations

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Investors are looking for much lower valuations, and profitability. Some companies, like Instacart, may check those boxes. Others — maybe most — won't.

Is the IPO market really opening up? A trio of IPOs have investors excited that we are re-entering a golden age of IPO issuance. Over the weekend, Goldman Sachs' chief U.S. equity strategist David Kostin said the IPO market was becoming more "normalized," meaning issuance was starting to pick up.

Instacart is experiencing this painful reality even before the IPO, with a valuation of $39 billion a couple years ago now reduced to roughly $10 billion. That has left several venture capital backers of Instacart with losing investments. Pitchbook notes that investors who only jumped in following its 2018 Series F, which priced just shy of $30 per share, "are likely to be underwater in at least some of their investments." That includes DST Global, General Catalyst, and T.

 

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