San Francisco, Calif.-based same-day grocery delivery startup Instacart, Co-Founded by Indian American Apoorva Mehta, announced March 8 it has raised $400 million in a new funding round.
Mehta, who also serves as the company’s chief executive officer, tweeted March 8 in a company blog, announcing the Series D financing round led by Sequoia Capital, which bumped the nearly 5-year-old company from a $2 billion valuation to $3.4 billion, the company said.
“Excited to share our new round of financing!” Mehta wrote in the tweet announcing the news.
Among the other investors in the latest round included Wellcome Trust, Y Combinator Continuity, Andreessen Horowitz, FundersClub, Khosla Ventures, Kleiner Perkins Caufield & Byers, Initialized Capital, Thrive Capital and Valiant Capital.
Instacart, which has teamed with grocers such as Whole Foods, Costco, Target, Safeway and more than 135 other retailers to allow its users to shop on its app and have groceries delivered the same day, as quickly as in an hour’s time.
“Our customers love Instacart because we make it easy to get delivery from their favorite local stores,” the company blog said. “We’re going to use these resources to grow Instacart and to invest in making our product even better. In fact, we’ve already started doing both.”
The company said that in 2016 it saved customers millions of hours of time which they used to spend more time with family, work or relax.
Additionally, the company expanded to nearly twice as many markets since January 2016, now serving 35 areas from 18 previously. It intends to expand to at least 60 markets this year.
The company, according to Mehta, has reached profitability in 25 of the 35 markets where it operates. In new markets, Instacart expects to reach profitability in six months or less.
Instacart has also worked with the CPG (consumer packaged goods) industry to create exclusive deals and discounts for its users. Currently, the company has more than 160 CPG partners, including Nestle, P&G, Unilever, General Mills, Coca-Cola and PepsiCo, it said.
Mehta, in a Fortune report, said the company will continue reducing delivery fees, critical to retaining customers, and eventually the largest portion of Instacart’s revenue will come from the coupon and promotion features.
The company also has a subscription service, similar to Amazon Prime, which Mehta said accounts for about half its customer base., the report noted.
Since it launched in July 2012, the company has raised roughly $675 million.
Previously, the startup had raised around $260 million at a reported $2 billion valuation. Instacart has operated solely within the U.S., where consumers spend more than $727 billion annually on food for consumption at home, according to the most recent available data from the U.S. Department of Agriculture.
“Our success would not be possible without the support of our incredible shoppers, customers, partners and team who are with us on this journey,” the company wrote.
Mehta earned a bachelor’s of science degree in electrical engineering from the University of Waterloo in 2008. He previously worked as a design engineer at Blackberry and Qualcomm, then joined Amazon.com as a supply chain engineer before founding Instacart in 2012.
Source: indiawest
