Instacart cuts valuation by nearly 40% to $24 billion

Instacart said it is slashing its valuation by nearly 40% to about $24 billion, to reflect the sell-off in tech stocks this year.

Grocery delivery company valued at $39 billion in March 2021, when it raised $265 million. That has made Instacart one of the most valuable venture-backed companies in America

However, with Nasdaq down 12% from its November high and many new public tech companies falling significantly more than thatInstacart is telling employees and potential recruits that upcoming stock bonuses will be issued at much lower prices, making stake packages more attractive and in line with market conditions.

“Markets fluctuate, but we are focused on Instacart’s long-term opportunity to power the future of grocery with our partners,” an Instacart spokesperson said in a statement. Father.

For Instacart, the past few years have been a roller coaster ride. Facing a challenging business model heading into 2020, the company got a big boost during the Covid-19 pandemic as many consumers cut back on trips to the supermarket and switched to grocery ordering. online.

After DoorDash’s blockbuster stock market debut By the end of 2020 and the rally in emerging tech stocks for most of last year, Instacart is seen as a top IPO candidate for 2022. Then there are two concerns about accelerating inflation and In anticipation of higher interest rates, risky assets begin to fall. in November.

The sell-off picked up slightly after Russia’s attack on Ukraine last month added to global uncertainty and a rise in energy prices in the mix. DoorDash has lost more than half of its value since mid-November.

Instacart is now under pressure to show it can maintain momentum as the pandemic breaks out and the labor market tightens.

Instacart said its business outlook remains solid, adding that it has more than $1 billion in cash in the bank. The company is also trying to expand beyond its core market, notification This week, a suite of software to sell to supermarkets, along with a fulfillment service called Carrot Warehouses, aims to help grocers deliver in 15 minutes.

– by CNBC Laura Batc started and Deirdre Bosa contributed to this report.

WATCH: Instacart CEO on expanding to 15-minute delivery

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