Same-day food delivery startup Instacart reportedly cut its internal valuation for the third time this year as it continues to advance plans for an initial public offering (IPO) amid falling prices and market volatility.
The reduction represents a two-thirds drop from its $39 billion value in 2021, The Information reported on Friday (Oct. 14), citing unnamed sources with inside information. The lower internal valuation reduces the price of new stock-based compensation issued to employees.
Read more: Instacart’s Path to IPO: 5 Key Moments
Because the majority of Instacart’s public offering is expected to be employee shares, the new internal valuation — known as a 409a valuation — could help the startup reset investor expectations before its IPO, per the report. In a 409a valuation, an independent third party evaluates the worth of a company’s stock.
In March, the company slashed its valuation to $24 billion, down 38% from its May internal valuation, and in July a second cut put its value to $15 billion, the news outlet reported.
See also: Instacart IPO Prep Includes Staff, Spending Reductions
Instacart filed confidentially for an IPO in May and in recent months laid off roughly 3,000 staff members — including at least three senior-level employees — as part of its preparation to get ready, PYMNTS reported last month.
The Silicon Valley delivery firm also cut back on new hires. Managers were also reportedly told to trim spending and expenses for travel and team gatherings.
Related: Instacart’s Connected Stores Blur the Lines Between In-Store and Digital Grocery Shopping
The current valuation of $13 billion puts Instacart’s common stock at $38.37, sources told The Information.
The timing of Instacart’s IPO is unknown and the window to go public is running out for 2022, according to the report. The delivery startup has been updating financial reports and moving toward making it happen.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More