Grocery delivery provider Instacart has reportedly lowered its internal valuation to $10 billion, which represents a significant decrease from the $39 billion the startup was worth last year. 

The Information reported the development on Tuesday, citing two people familiar with the matter.

San Francisco-based Instacart, officially Maplebear Inc., provides a popular grocery delivery app of the same name. Users can order goods from about 40,000 stores in more than 5,500 cities worldwide. It offers access to millions of products through its app, including not only groceries but also household essentials, sporting goods and a range of other items.

The company was worth $39 billion after its most recent $265 million funding round last year. This past March, it lowered its valuation by 40%, to $24 billion. It reportedly further lowered that number to $15 billion, $13 billion and finally $10 billion over the past few months.

The valuation reduction will affect Instacart’s upcoming stock market listing, which is expected to take place in 2023. The startup confidentially filed to go public in March and had originally intended to go public this year. According to The Information, it has held talks with more than 50 potential investors over the past 12 months to promote its planned public offering.

Amid the valuation cuts made over the past few months, Instacart continued to invest in growth initiatives. In Canada, the company onboarded 20 additional retailers to its app and increased the number of stores from which users can order goods by 60%. To expand its product portfolio, it acquired a startup with a software platform that helps retailers develop e-commerce websites and apps.

In-house product development initiatives also form part of its growth efforts. Earlier this year, the startup introduced a suite of technology products for retailers called Connected Stores. One of the products in the suite is a shopping cart that uses artificial intelligence to speed up the checkout process for customers. Another technology, Scan & Pay, enables users to make purchases in stores with their mobile devices.

Alongside grocery delivery and tools for retailers, Instacart provides advertising services. The startup enables brands to promote their products to consumers through its app’s interface. Last month, it introduced new advertising features to help brands optimize their marketing efforts.

Instacart is one of several well-funded consumer technology startups to have reduced their valuations in 2022. Another is Klarna AB Bank, the provider of a popular “buy now, pay later” service, which raised a $800 million funding round in July at a $6.7 billion valuation. The startup received a $45.6 billion valuation after its previous raise last June. 

Photo: Instacart