Instacart is not done making news.

Earlier this week, the famous grocery delivery unicorn announced a software suite in a self-proclaimed third act. Today, Bloomberg reported that Instacart reduced its valuation from about $39 billion to $24 billion, which represents a reduction of about 38.5% in the value of the company.

The comment indicates that the new “valuation” of the company was fixed by a price change 409a, not a decline in the value of the preferred shares sold in its last round. The nuance at play here is that 409a assessments are set by third parties – Carta does this work for clients, for example – and not by startups or their venture capitalists, which results in a more objective price by some metrics. That said, what we assume is a new 409a assessment for Instacart is significant.

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The change in valuation is part of a broader trend in the value of high-growth tech companies that has weakened in recent months. Since the highs of late 2021, public markets have reduced the value of technology companies large and small, SaaS and others. Instacart, which has a number of public comps thanks to DoorDash and Uber’s IPOs, lives in a world where it can directly compare its value to floating concerns.

The Exchange has gone deep into Instacart’s valuation change and has some notes on the company’s current trajectory. The evolution of the issue of the public market is only one theme at play in the smallest valuation of Instacart. The other is human talent. Let’s explore.

$24 billion is the new $39 billion

Instacart said it set a number of records in 2021, including order volume, gross trading volume, revenue and gross margin. The company also has over $1 billion in cash and cash equivalents in the bank, so it is far from short of capital.

Bloomberg also reported that the company had revenue of $1.8 billion in 2021, up from previous reports that the company was targeting $1.65 billion in revenue last year. At the higher figure and new Instacart valuation, the company has a revenue multiple of 13.3x. (Note that this is a more conservative measure than an ARR multiple that we calculate for pure software vendors.) At the company’s previous price of $39 billion, its 2021 revenue would have given it a much higher multiple of 21.7x.

Instacart isn’t the only grocery delivery company that has seen its revenue decline in recent months.

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