Instacart Sees Sharp Decline in Valuation, Entering a Period of Turmoil

Instacart's latest valuation has plummeted by tens of billions of dollars compared to its worth just a year ago, as the company navigates the challenging landscape of an initial public stock offering in the online delivery sector.

According to an updated IPO filing, the grocery delivery firm is aiming to price its stock in the range of $26 to $28 per share, resulting in a valuation of approximately $7.4 billion at the midpoint. When accounting for restricted stock, options, and warrants, the company's valuation could potentially reach as high as $9.3 billion.

When Instacart begins trading on the Nasdaq, it will be listed under the ticker symbol "CART." The situation is not entirely bleak for the company, as its filing revealed on Monday that, while it has a "history of losses," it has recently started to generate profits. During the first half of 2023, Instacart recorded a profit of $242 million, a significant turnaround from the $74 million loss it experienced during the same period a year ago.

Instacart experienced a surge in growth during the height of the pandemic, becoming a favored choice for consumers seeking grocery delivery services. However, as demand stabilized, some Instacart workers began to feel the impact of a sharp decline in orders. Additionally, competition in the grocery delivery sector has intensified, with Amazon and Walmart enhancing their own delivery offerings.

In response to these challenges, Instacart introduced new services to diversify its offerings to retail partners. This included a foray into faster deliveries, a competitive space attracting numerous emerging entrants.