Grocery delivery startup: Instacart cuts down valuation by 40 percent
- ByStartupStory | March 25, 2022
Instacart, the Grocery delivery startup has decided to slash its valuation internally to around $24 billion in an attempt in order to attract more talent and adapt to existing marketing conditions.
The startup, which operates in the US and Canada, last March raised $265 million, at a valuation of $39 billion from vaunted investors such as Andreessen Horowitz and Sequoia Capital. Nearly 40 percent lower is the current valuation correction.
Instacart’s decision in order to revalue is an attempt to be capable so as to provide better equity options to new employees, and also prevailing market conditions where investors are souring on tech-first companies. Instacart has had trouble building on the boost provided by the pandemic and lockdown, much like local competitors DoorDash and Uber Eats.
The company said in a statement that their team built Instacart into the market leader it is today, and they believe investing in them is the right thing to do. It further added that markets go up and down, but they are focused on Instacart’s long-term opportunity in order to power the future of grocery with their partners.
By these tailwinds in the grocery delivery business, Indian companies have also been hit. Blinkit (earlier known as Grofers), last year announced that it had attained unicorn status after raising $120 million from Zomato and Tiger Global, at the valuation of $1 billion and above.
However, a reduction in its valuation has also been seen, losing the unicorn tag, as this year it is now being aimed by Zomato to acquire the company at a valuation closer to $700-800 million.
As the stock price jumped by around Rs 5 at the time, Foodtech giant Zomato’s shareholders seemed to be pleased with the acquisition, but brokers had a dim view.
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