Instacart seeks US$10 billion valuation amid industry woes: WSJ

US GROCERY delivery startup Instacart is seeking a valuation of under US$10 billion as it goes public later this month, the Wall Street Journal reported on Sunday, substantially less than its US$39 billion valuation in 2021.

The company is to start pitching its initial public offering to investors at the lower valuation as early as Monday, “in the latest sign of diminished investor enthusiasm” for tech IPOs, the financial daily reported, citing sources close to the matter.

Shares trading under the symbol “CART” are expected to debut on the tech-rich Nasdaq the following week.

The valuation - which the company is targeting at US$8.6 billion to US$9.2 billion - could change between now and then as the company receives investor feedback, the Journal reported.

Founded in 2012, the venture capital backed startup saw its business soar early in the coronavirus pandemic as people avoided grocery stores due to the risks from Covid-19.

The company’s business went on to cool, however, leading to a cut to its workforce of shoppers.

In recent years Instacart has put a focus on orders being ready for pickup at grocery stores instead of being dropped off at customers’ doors.

Rising interest rates have diminished the values of many startups and other high-risk investments.

The tech industry at-large is weathering challenging economic conditions that have prompted layoffs and other cost-cutting measures.

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Maplebear Inc, which does business as Instacart, filed to become a publicly traded company on Aug 25.

It said in the filing that it had net income of US$242 million in the first half of this year.

The company warned that it has a history of losses and “may be unable to sustain profitability or generate profitable growth in the future.” AFP