Dive Brief:

• Instacart has cut its valuation to about $13 billion, marking the third time this year the company has lowered its valuation, The Information and Bloomberg reported, citing unnamed sources familiar with the matter. Instacart declined to comment. 
• Instacart previously cut its valuation by nearly 40% to $24 billion in March and then to $15 billion in July, according to Barron’s.
• This third cut precedes Instacart’s plans to go public and comes at a time when technology companies are grappling with a challenging economic landscape. 

Dive Insight:

After a $265 million funding round in March 2021 more than doubled Instacart’s valuation to $39 billion, the company has chipped away at that figure this year as growth has slowed.

Bloomberg said Instacart unveiled the new valuation at a company meeting on Thursday, with executives claiming volatile market conditions caused the change. The publication reported that executives stressed the fundamentals of the business are healthy and that they’re waiting for the right market conditions to go public.

The new valuation of $13 billion puts Instacart closer in line with investor Capital Group’s calculation this summer that put the grocery technology company’s valuation at $14.7 billion. 

Both The Information and Bloomberg reported that Instacart’s common stock is now valued at just over $38 a share. The internal share price change was part of a 409a valuation, which is conducted by an independent third-party to determine how much a company’s stock is worth, the publications noted. 

In May, Instacart filed a confidential draft registration statement with the Securities and Exchange Commission —  a long-awaited step for the company in its journey to go public. 

The IPO market has decelerated quickly in the latter half of this year as macroeconomic pressures rise. Investors have been grappling with high inflation and rising interest rates and many recent IPOs have underperformed.

Over the past year, Instacart has been busy adding services and solutions for retailers, including in-store offerings as part of its Connected Stores suite and announced sweeping health-focused initiatives. The company has also launched new products for CPG partners, ventured further into shoppable recipes and expanded its number of retailer clients in North America. 

Instacart has also been on an acquisition tear, snapping up Eversight, an artificial intelligence-powered pricing and promotions platform, and e-commerce tech provider Rosie for undisclosed amounts last month, following its purchases of smart cart maker Caper AI for $350 million and catering software firm FoodStorm for an undisclosed amount last fall.