May 22, 2022

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Instacart lowered the valuation by about 40% to $24 billion

Instacart lowered the valuation by about 40% to $24 billion

Instacart said it cut its valuation nearly 40% to about $24 billion, to reflect this year’s sell-off in technology stocks.

Grocery delivery company It was worth 39 billion dollars In March 2021, when it raised $265 million. This has made Instacart one of the most valuable venture-backed companies in the United States

However, with the Nasdaq down 12% from its high in November, many new public tech companies are down Much more than thatInstacart tells its employees and potential recruits that upcoming stock awards will be issued at a much lower price, making stock packages more attractive and in line with market conditions.

“Markets go up and down, but we are focused on Instacart’s long-term opportunity to support the future of grocery with our partners,” an Instacart spokesperson said in a statement.

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

In July, shortly after Instacart’s big funding round, the company hired a former Facebook executive Fiji Simo As CEO, subsequent founder Apurva Mehta.

after doordash Turnout For the first time in the stock market In late 2020 and with tech startup stocks soaring for most of the past year, Instacart was seen as a major IPO candidate for 2022. Then came the twin fears of accelerating inflation and expectations of higher interest rates, sending risky assets into collapse. In November.

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The selling gained steam after Russia’s attack on Ukraine last month added global instability and a further increase in energy prices to the mix. DoorDash has lost more than half its value since mid-November.

The valuation downgrade is not a panacea for Instacart, which is now under pressure to show it can maintain its business momentum as the pandemic subsides and the labor market tightens. Employees who have received stock grants at higher prices need to see a rebound in order to make money from their stock.

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 market, announcing This week a set of programs to sell to supermarkets, along with a fulfillment service called Carrot Warehouses, which aims to help grocers offer 15-minute delivery.

– CNBC channel Laura Batchelor And the Deirdre Bossa Contribute to this report.

Watch: Instacart CEO on 15-minute delivery expansion