Instacart Inc., a pandemic darling that’s now facing decelerating growth, is slashing its valuation by almost 40% to about $24 billion, a move it says will help the company attract talent and adapt to market conditions.
The grocery-delivery startup had been valued at $39 billion in its most recent fundraising round, when it snagged $265 million last year from investors such as Andreessen Horowitz, Sequoia Capital and D1 Capital Partners, as well as Fidelity Management & Research Co. and T. Rowe Price Associates Inc.
Instacart hopes the move will boost recruiting and retention efforts by aligning new equity awards with the updated valuation that could have more potential for gains over the long term if the company regains favor in the markets. Recently, investors have been souring on private and public technology companies.
“Our team built Instacart into the market leader it is today, and we believe investing in them is the right thing to do,” Instacart said in a statement Thursday. “Markets go up and down, but we are focused on Instacart’s long-term opportunity to power the future of grocery with our partners.”