Instacart Inc slashed its valuation by nearly 40% to around $24 billion (€21.8 billion) due to recent market turmoil, underscoring the difficulties facing US grocery delivery companies as competition is intensifying.
In March last year, as the coronavirus pandemic raged and home delivery exploded, Instacart was valued at $39 billion (€35.4 billion), doubling its valuation in less than six months. . Rival Gopuff recorded a 69% jump in its valuation to around $15 billion (€13.6 billion) in July.
But the reversal in the fortunes of Instacart, whose investors include Andreessen Horowitz and Sequoia Capital, comes as retail giant Walmart Inc boosted grocery deliveries and DoorDash Inc stepped up for a bigger share. delivery activity.
However, competition has also weighed on the market value of DoorDash and Uber. Jechnologies Inc amid a broader decline in tech stocks in recent months.
It fell 23% for DoorDash, which was in full expansion and had recently decided to buy its European rival Wolt for 8 billion dollars (7.3 billion euros).
Uber lost almost 17% while its small rival Buyk filed for bankruptcy protection and Fridge No More went out of business.
“We are not immune to the market turmoil that has affected major tech companies – both public and private,” an Instacart spokesperson said.
Read more: Instacart appoints Facebook app manager Simo as CEO
The company said the updated assessment will help it attract and retain talent in a tight U.S. job market by lining up new equity rewards.
Reuters reported last year that Instacart was considering going public via a direct listing, fearing it would leave money on the table via a traditional initial public offering.
The decision to cut the valuation was first reported by Bloomberg News.
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