Sources: Instacart slashed its internal valuation to ~$13B, its third cut in 2022 and 67% below its 2021 valuation, to reset investor expectations for its IPO
Instacart, the instant delivery company gearing up to go public, has slashed its internal valuation to about $13 billion, according to two people familiar with the matter.
Context & Ripple Effects
Instacart entered 2022 valued at $39B from its March 2021 raise, then began a quarterly ritual of marking itself down: a voluntary cut to ~$24B in March framed as a recruiting and retention move, followed by a hiring slowdown after adding over 1,500 staff in 2021. By July, outside holders were doing the same math — Capital Group marked its stake down to $14.7B.
This third internal cut to ~$13B makes the markdown official company policy rather than investor pessimism, and it is explicitly aimed at resetting expectations for an IPO rather than at headcount. The trajectory kept going — a further cut to ~$10B by year-end — before Instacart ultimately filed to raise up to $616M at an up-to-$7.73B valuation.
First-order effects
- Instacart employees holding equity grants see their paper compensation fall another ~46% from the March $24B mark, compounding the retention problem the earlier cut was meant to solve.
- Prospective IPO investors get a pre-anchored price floor well below the 2021 private mark, reducing the risk of a listing priced off stale numbers.
Second-order effects
- Other mutual funds and cross-over investors holding late-stage delivery stakes face pressure to follow Capital Group's lead and mark their positions down, since the company itself has now validated the lower number.
- Rival grocery-delivery players preparing their own listings lose the $39B comparable as a benchmark, forcing them to justify valuations against Instacart's deflated marks instead.
Third-order effects
- If the pattern holds, pre-IPO companies will keep repricing themselves downward each quarter until public-market buyers set the price — collapsing the gap between peak private rounds and listing valuations, and making the 2021-era markup-and-hold approach untenable.
The trend: Late-stage startups are abandoning defense of peak private valuations and self-marking down ahead of listings, letting the IPO — not the last funding round — become the real price discovery event.