The Information reports that Instacart "has cut its internal valuation to around $10 billion, according to two people familiar with the situation. The new valuation is 20% lower than the one it had in October and nearly 75% lower than the price investors paid for shares early last year, when its paper valuation was $39 billion."
Instacart is expected to have an Initial Public Offering (IPO) later this year after having delayed its plans to go public in 2022. The company hardly is alone - "investor perceptions of app-driven delivery startups - a sector that raised billions of dollars during the recent funding boom " - have "soured" as the entire tech economy has been hit hard by inflation and a post-pandemic economy.
However, the story notes that Instacart's "revenue has continued to rise," according to CEO Fidji Simo. "She told employees in mid-October that third quarter earnings had more than doubled since the second quarter, and that revenue and gross profit in the third quarter of the year had increased more than 40% from the same period the previous year."
- KC's View:
This gets a lot of attention, but I have to admit that I am a lot less interested in an Instacart IPO than I am in how the service provider will help retailers - especially independent retailers - not just compete with the likes of Amazon and Walmart, but cope with a fractious economic environment that is creating a lot of change in the e-grocery sector.