USA – American grocery delivery company, Instacart has increased its valuation to US$13.7 billion following a new financing round that saw the company bag US$225 million from global investment firms including DST Global and General Catalyst.
The investment, which comes as Instacart continues to experience a surge in customer demand for grocery delivery and pickup across North America, will enable the company to further scale up its technology and operations to meet the rising demand especially as online food delivery continues to gain traction.
Markedly, the eight-year old grocery delivery unicorn notes that COVID-19 has changed the rhythm of life for families everywhere and fundamentally reshaped the way people think about on-demand services.
“Millions of people across North America are now relying on Instacart as an essential service to get access to the groceries and goods they need,” the company said in a statement.
This has seen the company double the size of its shopper community across US and Canada, expand its partnerships with retailers while “offering more than 500,000 people a safe, immediate and flexible earnings opportunity during this economic downturn.”
The San-Francisco-based company has partnered with more than 400 national, regional and local retailers to deliver groceries and household essentials from more than 30,000 stores across the US and Canada, from a one shopper in the summer of 2012 when the company started operations.
In addition to groceries and everyday essentials, the company has also extended its aisles of offering over the last year to include delivery and pickup services for alcohol and prescriptions.
Today, the company says that it is accessible to more than 85% of households in the U.S., across all 50 states, and more than 70% of households in Canada.
Instacart, which last raised funds in 2018 when it was valued at US$8 billion, says that looking ahead, the new funding will charge its ambitious plans for future growth.
“This new investment will enable us to deepen our support for our shopper community, further fund strategic business initiatives like Instacart Advertising and Enterprise, and continue to scale our technology and operations to meet the needs of all the communities we serve,” the company disclosed in a statement.
“We’re proud to play an important role in helping feed families across North America, and look forward to continuing to support customers, shoppers and retailers for years to come,” Instacart added.
The development comes at a time when delivery companies the US online food delivery market are consolidating their operations to reduce cash burn and expand their market share.
On June 10, Just Eat Takeaway announced that it had entered into an all-stock agreement to purchase Grubhub after previously reported deal with San-Fransico-based Uber Technologies fell through due to disagreements over price and the likelihood of antitrust scrutiny.
Packaged Facts analyst Cara Rasch observes that “this deal will allow the European Just Eat Takeaway to gain a larger footprint in North America, while it will also help to diversify Grubhub’s business.
Cara noted that Skip the Dishes, a subsidiary of Just Eat Takeaway, “does a lot of business in Canada and could help the Grubhub brand expand more broadly through North America.”
The move further reinforces the growth prospects for food carryout and delivery, which analyst Cara says were strong even before the coronavirus outbreak. “The outlook is even brighter for these applications following mandated social distancing guidelines that have shuttered dine-in service or forced restaurants to greatly limit their dine-in capacity.”
Earlier this year, Dutch food delivery firm Takeaway.com merged with its British rival Just Eat to form Just Eat Takeaway in a US$7.6 billion takeover.
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