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There’s speculation that Instacart may be planning an IPO soon. The company raised $200 million in October, fueling IPO rumors. And with the passing of Proposition 22 in California, Instacart will be allowed to classify their workers as contractors instead of employees, which removes a major blocker for the company.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
Monday, March 8: Instacart reportedly raised $265 million in a private funding round, bringing its valuation to $39 billion.
Friday, March 5: Instacart may be going public via a direct listing. Sources close to the deal have suggested a direct listing is on the horizon. The company has not confirmed this rumor, however.
Thursday, November 12: Instacart taps Goldman Sachs to lead its IPO.
What we know about the Instacart IPO
Instacart plans to go public with a $30 billion valuation and Goldman Sachs helming the deal, according to Reuters. But Instacart has yet to file a viewable Form S-1 with the US Securities and Exchange Commission, so little more is known about the grocery delivery service’s pending IPO.
There’s no news yet about how much the stock will cost when it goes public. It’s expected to launch in 2021. We’ll update this page with information as it becomes available.
What we know about Instacart’s balance sheet
Instacart’s valuation of $30 billion in October 2020 followed a series of milestones for the company. It first became profitable in April after having lost $300 million in 2019. CEO Apoorva Mehta noted that feat cleared it past its 2022 goals.
The surge was partly driven by the COVID-19 pandemic which triggered lockdowns and forced people to stay home. Customers bought $700 million worth of goods through Instacart in each of the first two weeks of April, marking a 450% increase from December 2019. And other companies heard the noise. Since March, Instacart has extended pick-up services to more than 1,500 stores. It provides pickup services for more than 60 major grocers in the US. It has also set its sights beyond groceries and supermarkets by working with companies like Sephora and 7-Eleven.
San Francisco-based Instacart currently serves more than 7.5 million customers. Instacart has not released its earnings for 2020. But amid the optimism, it sought to reel in $35 billion in grocery sales.
Still, it’s unclear whether the online grocery delivery service will keep speeding forward. It still faces stiff competition from the likes of Uber and DoorDash, which recently went public.
It’s also important to note that Instacart saw a surge in demand in the early days of the COVID-19 pandemic. Some areas are beginning to ease lockdown restrictions as vaccines are rolled out. If the pandemic is quashed soon, it’s unclear whether customers would remain loyal to Instacart or return to the traditional way of shopping for everyday needs.
Will I be able to buy Instacart stocks from Canada?
You won’t be able to buy Instacart stocks on a Canadian stock exchange like the TSX or CSE. Given that Instacart is a US-based company, you’ll likely need a company that provides access to US stock exchanges like the NASDAQ and NYSE.
The process of buying stocks in a US company while living in Canada is the same as buying stocks in a Canadian company. You buy and sell using your online trading account or through an investment broker who handles US stocks.
How to buy shares in Instacart when it goes public
Once Instacart goes public, you’ll need a brokerage account to invest. Consider opening a brokerage account today so you’re ready as soon as the stock hits the market.
- Compare stock trading platforms. If you’re a beginner, look for a platform with low commissions, expert ratings and investment tools to track your portfolio. Narrow down top brands with our comparison table.
- Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and bank information. Fund your account with a bank transfer, credit card or debit card.
- Search for Instacart. Find the stock by name or ticker symbol. Research its history to confirm it’s a solid investment against your financial goals.
- Purchase now or later. Buy immediately with a market order or use a limit order to delay your purchase until Instacart reaches your desired price. To spread out your purchase, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
- Decide on how many to buy. Weigh your budget against a diversified portfolio that can minimize risk through the market’s ups and downs. You may be able to buy a fractional share of Instacart, depending on your broker.
- Check in on your investment. Optimize your portfolio by tracking how your stock — and the business as a whole — performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights on directors and management decisions that affect your stocks.
Tax implications of buying US stocks in Canada
Agreements between Canada and the US require Canadians holding US stock investments to pay the US Internal Revenue Service (IRS) a 15% withholding tax on any dividends earned on their US stocks. Interest earned from bonds or other interest-yielding US investments are similarly taxed at a rate of 10%.
An exception is made for stock investments held in trust exclusively designed to provide retirement income. Such trusts include RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. RRSPs are also exempt from US withholding tax if you own US investments in the form of US stocks, bonds or ETFs.
All income from investments, including foreign investments, must be declared as part of your income on your Canadian tax return. Unless your US earnings are exempt from withholding tax, this means you’ll be double taxed on those earnings — first by the IRS, then by the CRA. However, the CRA may allow you to claim foreign tax credits for any taxes you’ve already paid to the IRS.
Speak with a tax professional to find out what rules and exceptions apply to your circumstances.
Compare trading platforms that provide access to Canadian and US stocks
Compare special offers, fees structures and a types of investments that are available with some of Canada’s top stock trading platforms.
Note: The dollar amounts in the table below are in Canadian dollars.
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