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Instacart opened for trading Tuesday, initially soaring 40% above its IPO price. It’s one more sign that that the market for initial public offerings is recovering.

After pricing the IPO at $30 a share Monday night—at the upper end of its expected range—the stock (ticker: CART) opened at $42, giving the delivery firm a market value of $13.9 billion, based on the company’s fully diluted share count.

The stock traded as high as $42.95 moments after the open and then pulled back to a recent $38.53, 28% above the IPO price.

The San-Francisco based company said late Monday that it sold 22 million shares in the IPO, raising a total of $660 million, roughly $420 million of which goes to the company.

Instacart is one of the year’s most hotly watched IPOs, following the listing of chip designer Arm Holdings (ticker: ARM) last week. Taken together, they are expected to crack open the window for the IPO market, which has been quiet for most of the year. Klaviyo, a marketing software company, is expected to start trading on Wednesday.

How

Instacart

trades beyond Tuesday will depend on investors’ faith in the future of the gig economy’s expansion and profitability. Maplebear, as Instacart is formally known, generated $2.55 billion in revenue last year, up 39% from a year earlier. Roughly three-quarters of that revenue came from the company’s core business of delivering groceries to homes with the help of contractors. The rest was generated from other services and a new offering called Instacart Ads, where retailers pay to show ads to customers.

Instacart had net losses of $70 million and $73 million in 2020 and 2021, respectively. It generated net income of $428 million in 2022, though much of that came from a $358 million tax benefit.

At the $42 opening price, Instacart was valued at about six times its annual sales.

DoorDash

 (DASH), named as a competitor in Instacart’s filings, has a cheaper price-to-sales ratio of 4.1 times. DoorDash has consistently increased annual sales after going public in 2020, but the company has yet to turn a per-share profit.

Instacart also lists UberEats, part of

Uber Technologies

(UBER), and Shipt, owned by Target, as competitors.

Instacart, which was founded in 2012, officially filed to go public on Aug. 25 after a long wait—the company had first filed a confidential registration statement for a potential IPO in May 2022. In its round of private fundraising, Instacart was valued at $39 billion, miles apart from its current valuation .

Write to Karishma Vanjani at karishma.vanjani@dowjones.com