Instacart was just insta-devalued. 🤭 The company blossomed during the pandemic, but has since decided to cut its previous $39 billion valuation by 40% amid slowed growth.
Instcart’s last funding round (which included legendary names like Andreessen Horowitz, D1 Capital Partners, and Sequoia Capital) raised $265 million at a ~$40 billion valuation. However, Instacart has decided to voluntarily decrease its valuation in an effort to adjust to current market conditions and attract new talent.
It’s uncommon for start-ups to conduct voluntary “down rounds,” as they’re called in the VC world. It seems like Instacart has a plan, though — the company claims to have over $1 billion stored in cash, and even increased revenue by 20% last year. Nonetheless, according to Bloomberg, rising rates and inflation probably contributed to Instacart’s unique “down round.”
Yeah, it’s odd to see this kind of headline for a player like Instacart that has literally dominated 52% of the grocery delivery market since December. Instacart commented on its decision to lower its valuation:
“Our team built Instacart into the market leader it is today, and we believe investing in them is the right thing to do. Markets go up and down, but we are focused on Instacart’s long-term opportunity to power the future of grocery with our partners.”
Only time will tell how things work out for the start-up. 🤷 ⏳