Instacart Valuation Cut for Fourth Time in 2022

Instacart has reportedly lowered its valuation by 20%, in what would be the 4th such reduction this year.

According to a report in The Information Tuesday (Dec. 27) that cites unnamed sources, the grocery delivery service provider’s internal valuation now stands at $10 Billion, that’s down from $24 billion in March, $15 billion in July and $13 billion in October.

The firm’s so-called 409a valuation, an appraisal of the fair market value, is evaluated by an independent third party, the report said, noting Instacart’s peak value of $39 billion was set in early 2021.

Instacart did not immediately reply to PYMNTS’ request for comment.

The firm had planned to go public in October but pulled back to wait for a more favorable business climate, as 2022 has been one of the worst years for initial public offerings (IPOs) in more than a decade, multiple media reports said.

In April, The Wall Street Journal reported that Instacart was considering how to move forward after being involved in the mass eCommerce drive of the pandemic.

There’s more competition now, with several retailers now using multiple delivery companies to handle online orders and negotiate better terms, according to the report.

Other grocers are building their own networks — and some are encouraging a return to in-person shopping, which is the most profitable option for the retailers as there are no delivery fees or product markups, the April report said.

For example, as PYMNTS reported Dec. 20, Uber Eats has been courting grocery delivery partners, and on Dec. 16 announced that in the latest such partnership it will deliver from 250 of Midwestern retailer Meijer’s 500 stores.

In addition, DoorDash recently announced a partnership with Kroger to deliver flowers and sushi from the grocery giant, and Grubhub has made its own forays into the grocery space.

PYMNTS research has found that consumer adoption of online grocery shopping has lagged behind their embrace of digital restaurant engagement.

Research from the latest edition of PYMNTS’ monthly ConnectedEconomy study, the “ConnectedEconomy Monthly Report: The Gender Divide Edition,” found that while 54% of men and 47% of women engage with restaurants via digital channels, only 42% and 31% respectively do the same with grocers.