Instacart raises massive US$225M as it surges past Walmart in online delivery market
California-based grocery delivery company Instacart has raised a massive US$225m in a new financing round.
The announcement on Thursday, which comes amid an unprecedented surge in customer demand, increases the company's valuation to US$13.7bn.
The Covid-19 pandemic has given a large boost to online grocery orders, but Instacart has benefitted a lot more in the business than its bigger rival - Walmart.
Walmart saw its weekly share of the online grocery business relative to other major players in the category drop to around 25% in March, after ranging between about 40% and 50% for more than a year. Meanwhile, Instacart’s share spiked dramatically, reaching a high of 57% in April. For the previous year, it had been hovering around the 30% mark.
Instacart's latest funding round was led by DST Global and General Catalyst, with existing investor D1 Capital Partners participating.
"COVID-19 created a massive shift for the grocery industry and forever changed how people view the necessity of on-demand services," Apoorva Mehta, founder and CEO of Instacart.
"Overnight, Instacart became an essential service for millions of families across North America and our teams have worked incredibly hard to safely serve customers and shoppers during this time of need.
We have ambitious plans for the future and this new investment enables us to deepen our support for our shoppers and partners, further fund strategic initiatives such as our advertising and enterprise businesses, and continue to deliver exceptional experiences for customers."
Instacart says it is currently accessible to more than 85% of households in the U.S., across all 50 states, and more than 70% of households in Canada.
The company has accelerated its launch cadence with retailers since the start of the year and now partners with more than 400 national, regional and local retailers across more than 30,000 stores in the U.S. and Canada.