Report: Instacart Ups Internal Valuation by $2 Billion After Series of Cuts

Instacart has reportedly raised its internal valuation after cutting it several times.

The privately held delivery firm hiked its internal price 18% in late February, The Information reported Sunday (April 2), citing a source with direct knowledge.

PYMNTS has contacted Instacart for comment but has not yet received a reply.

The internal price — otherwise known as a 409a valuation — is different from the valuation determined by investors and is a measure of employees’ equity in the company.

The Information noted that although this means Instacart’s internal share price is still likely about 70% lower than where it was two years ago, the company’s move could be a harbinger of raises by other long-lived startups.

A source told The Information that the raised price is a reflection of Instacart’s financial performance in December of last year and January and February, and also the results of other publicly traded stocks.

The new price implies a corporate valuation of about $12 billion, up from around $10 billion, the number the company was left with after it cut its internal share price by 20% near the end of 2022, the fourth reduction that year.

Instacart’s internal valuation stood at $24 billion in March of last year, $15 billion in July and $13 billion in October. The company’s peak internal value was $39 billion, set in early 2021.

Back then, it and other delivery companies were enjoying booming business due to the COVID-19 pandemic, a trend that has cooled as consumers look to tighten their budgets.

But last month, a report from The Wall Street Journal said Instacart had seen its revenues jump more than 50% in the closing quarter of 2022, while gross profit climbed more than 80%. Sources told the newspaper that Instacart’s full-year revenue rose 39% to around $2.5 billion for 2022, with the company processed $29 billion in overall sales, up 16% from 2021.

Instacart had hoped to go public last year, but reportedly suspended its plans in October to wait out what was one of the most dismal years for initial public offerings in more than a decade.

The past year has also seen payments firm Stripe cut its internal valuation three times, most recently in January, where it lowered that figure by 11%, which represents an implied valuation of $63 billion.

The privately owned Stripe, which was valued at $95 billion in 2021 following a $600 million funding round, cut its internal valuation by 28% in June 2022. A smaller reduction followed in October, adding up to a 40% reduction over six months.