Instacart slashes its valuation by 40% to $24B

Question

Instacart intentionally cut its valuation by 40%, does this mean private markets are overvalued right now? Are we due for a correction? They say that this decision to lower the valuation will actually allow them to attract more talent

https://www.bloomberg.com/news/articles/2022-03-25/instacart-slashes-its-valuation-by-almost-40-to-24-billion

leggo · Accepted Answer

I am currently at Instacart. Move makes sense to attract new talent but everyone who joined last year at 39B are currently not very happy (myself included).

They haven’t topped our equity but are going to offer refreshers at the new valuation.

coffeepls · Answer

Not a VC by any means but the things I’ve been hearing on the All In podcast are very relevant to this. They’ve been saying that a lot of pre-ipo unicorns have some really high valuations

19g616l0uv2tam · Answer

why not just offer 40% more equity, more likely they expected to have trouble raising at the higher valuation

jinyung2 · Answer

there's honestly a ton of info here in this article, seems like a very uncommon move instacart has pulled to voluntarily reduce its valuation? 
Article states some really interesting things:
- Has over $1 billion in cash + marketable securities
- doesnt need to raise more capital
- despite slowing growth as pandemic is waning, revenue increase by 20% in 2021
- 52%(!!!) market share in grocery delivery business

It's an interesting move from the company and I am curious how it will turn out

19g615l16zsd2z · Answer

I don't understand how a lower valuation will attract more talent. Can someone explain this?

Instacart slashes its valuation by 40% to $24B

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