This is Why Instacart Slashed its Valuation By Nearly 40%

Grocery delivery and pick up service company Instacart slashed its valuation by almost 40% to $24 billion as tech stocks plummet.

The company announced the slash of its valuation from $39 billion to $24 billion on Friday and told its employees and potential recruits that upcoming stock awards will be issued at a much lower price, making equity packages more attractive and in alignment with market conditions.

As a part of lowering its valuation, the company can now offer stock awards to new and current employees at a more attractive price.

At its $39 billion valuation, Instacart had been one of the most valuable venture-backed companies in the U.S.

Unfortunately, the Nasdaq has fallen 12% from its November high and numerous newly public tech companies down significantly more than that.

“Markets go up and down, 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.

The Covid-19 pandemic had helped Instacart get a major boost to its business as consumers turned to online grocery orders to avoid crowds.

It was last summer that the company also named ex-Facebook executive Fidji Simo as CEO.

Instacart said its business outlook remains strong, adding that it has more than $1 billion in cash in the bank. The company is also trying to expand beyond its core marketplace, announcing this week a software suite to sell to supermarkets, along with a fulfillment service called Carrot Warehouses, which is intended to help grocers offer 15-minute delivery.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.