[SAN FRANCISCO] Investors pushed the value of Instacart to US$17.7 billion in a new private funding round, more than doubling the valuation of the grocery-delivery startup since the start of the coronavirus pandemic.
Valiant Peregrine Fund and Daniel Sundheim's D1 Capital Partners, two existing investors in Instacart, led the round, the grocery startup said on Thursday. Instacart plans to use the US$200 million investment to develop its website, ad business and services for retail stores.
Founded in 2012, the San Francisco-based company was initially something of a luxury service for people willing to pay a premium to avoid going to the grocery store. Its utility was transformed in March when the virus hit North America and drove a surge in demand for home delivery. Instacart suddenly surpassed milestones it had set for itself to reach in 2025. In May, Instacart told Bloomberg it was on track to process more than US$35 billion in grocery sales this year.
The sudden growth brought challenges. Instacart workers staged strikes for expanded safety measures, and some found themselves competing with automated bots for orders. The company faced new competition from the likes of Uber Technologies' Cornershop, which Instacart sued in July for intellectual property theft.
Instacart said it's available in more than 85 per cent of US households and more than 70 per cent of those in Canada. The service has added new stores in recent months, including 7-Eleven and Sephora.