In response to changing market conditions, Instacart is cutting its internal valuation by 38% to $24 billion from the $39 billion it was valued following a $265 million funding round last year, according to reports on Friday (March 25).
“We are confident in the strength of our business, but we are not immune to the market turbulence that has impacted leading technology companies both public and private,” an Instacart spokesperson said in a statement emailed tonPYMNTS.
It’s not a typical move for a private company to adjust its valuation. The decision was told to employees a day before being announced to the public, Instacart said. Providing the market comes back, employees could end up with stock-based compensation that’s worth more in the long run.
“Our team built Instacart into the market leader it is today, and we believe investing in them is the right thing to do. Markets go up and down, but we are focused on Instacart’s long-term opportunity to power the future of grocery with our partners.”
Instacart said its cash on hand totaled over $1 billion and it had no need to raise funds in the near future.
Related: Instacart Plans Micro-Fulfillment Warehouses for Instant Delivery
The Silicon Valley-headquartered grocery delivery platform said on Wednesday (March 23) that it was introducing micro-fulfillment warehouses for instant delivery, along with advertising technology, data analytics, and in-store technology like smart shopping trolleys. A pilot program is being launched with the Florida grocery chain Publix, with initial launch plans in Miami and Atlanta.
Fidji Simo, who was named Instacart CEO last August after a decade as an executive with Facebook, said that the grocery industry is in the midst of a major transformation. In an interview earlier this week, she said she believed it was “the third act of the company.”
Founded in 2012, Instacart currently has a 52% market share of the grocery delivery space, driven in part by the COVID-19 pandemic that advanced the company to be among the most valuable private firms in Silicon Valley, according to YipitData.
Read more: Instacart, DoorDash, Others Turn Focus Away From Food as Pandemic Wanes
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More