DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
Technology

Instacart Cuts Valuation By 40% As Race In Delivery Space Heats Up

By Dayeeta Das
Share this article
Instacart Cuts Valuation By 40% As Race In Delivery Space Heats Up

Instacart Inc slashed its valuation by nearly 40% to about $24 billion (€21.8 billion) due to recent market turbulence, underscoring the difficulties US grocery delivery firms are facing as competition heats up.

In March last year, when the coronavirus pandemic was raging and doorstep delivery boomed, Instacart was valued at $39 billion (€35.4 billion), doubling its valuation in less than six months. Rival Gopuff recorded a 69% jump in valuation to around $15 billion (€13.6 billion) in July.

But the reversal in fortunes for Instacart, whose investors include Andreessen Horowitz and Sequoia Capital, comes as retail giant Walmart Inc beefed up its grocery deliveries and DoorDash Inc ratcheted up its push for a bigger share of the delivery business.

Competition

However, the competition has also taken its toll on the market value of DoorDash and Uber Technologies Inc amid a broader decline in technology stocks in the recent months.

It tanked 23% for DoorDash, which has been rapidly expanding and had recently decided to buy European rival Wolt for $8 billion (€7.3 billion).

ADVERTISEMENT

Uber has shed nearly 17% while smaller rival Buyk filed for bankruptcy protection and Fridge No More shut down its operations.

"We are not immune to the market turbulence that has impacted leading technology companies - both public and private," said an Instacart spokesperson.

Read More: Instacart Names Facebook App Head Simo As CEO

The company said the updated valuation would help it attract and retain talent in a tight US labour market by aligning new equity awards.

ADVERTISEMENT

Reuters reported last year that Instacart is considering going public through a direct listing, concerned that it could leave money on the table through a traditional initial public offering.

The decision to slash valuation was first reported by Bloomberg News.

News by Reuters, edited by ESM – your source for the latest technology news. Click subscribe to sign up to ESM: European Supermarket Magazine.

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.