One-Hour Grocery Delivery Service Instacart Raises $44M Series B Round Led by Andreessen Horowitz
Existing Investors Sequoia Capital, Khosla Ventures, Canaan Partners Also Participate; Company's Revenue Has Grown 15x in Nine Months
SAN FRANCISCO, Calif., June 16, 2014-- Instacart (www.Instacart.com), the only service that can deliver groceries from multiple local stores within an hour, announced today that is has completed a $44M Series B financing round led by Andreessen Horowitz. Existing investors Sequoia Capital, Khosla Ventures and Canaan Partners also participated in the round. In addition, Aaron Levie, CEO of Box, and Sam Altman, President of Y Combinator, made personal investments.
Instacart has raced past the goals it set for itself when the company announced its Series A round in June 2013. At that time, the company pledged to be in 10 major cities, including its home city of San Francisco, by the end of 2014. Instead, by May 2014, it had reached that goal, with many more city launches planned in the coming months. Instacart Founder Apoorva Mehta now believes the company will be in 17 cities by the end of 2014, nearly double its original goal. The company's revenue has grown by 15x over the past nine months.
Originally launched in San Francisco and since expanded into many other major cities, Instacart has disrupted the traditional grocery delivery space with its crowdsourced labor force dubbed "Personal Shoppers" who shop for and deliver grocery orders providing their own transportation in as little as one hour. This eliminates the need for costly infrastructure such as inventory, warehouses, trucks and full-time drivers.
"As we think about the future of e-commerce, groceries are among the last huge untapped opportunities. While many have tried to crack the code, few have met with success," said Jeff Jordan, Partner at Andreessen Horowitz. "However, mobile is enabling a new way to tackle digital grocery distribution through an execution that I refer to as 'People Marketplaces.' This is Instacart's approach, and we're betting it will be the winning play. We are excited to partner with Apoorva and team as they seek to have software eat grocery delivery."
Instacart currently operates in San Francisco, Austin, Boston, Chicago, Los Angeles, New York City, Philadelphia, San Jose, Seattle and Washington, DC. Its crowdsourced model enables the company to expand into a new city in just 2-3 weeks, versus 6-9 months for competitors who rely on traditional warehouses, company-owned trucks and full-time drivers. Instacart's flexibility and lack of expensive infrastructure also enables its Personal Shoppers to shop for and deliver groceries within one hour -- something its competitors can't even come close to matching. And by using the stores as its warehouses, Instacart can offer unparalleled selection for customers.
According to Mehta, Instacart will apply the proceeds of the funding in four main areas:
◦Continued improvements to the customer experience;
◦Experimenting with new and innovative models for delivery; and
◦Continued improvements to the proprietary technology that makes Instacart tick.
"We've proven out our model in 10 cities across the U.S., and it works," said Mehta. "Instacart's customer base in every city is growing by double digits monthly, and we've developed a great playbook for geographic expansions. This funding will enable us to expand even more quickly and establish a wide, national footprint over the next 18 months."
Customers can open an account at www.Instacart.com, and get free delivery on their first order of $35 or more. Instacart also offers an Amazon-Prime like service called Instacart Express -- an annual membership that eliminates delivery fees for all orders of $35 or more. The cost is just $99. Customers can sign up for a free two-week trial at www.instacart.com/express.
Instacart is the only service that can deliver groceries from multiple local stores within an hour, and is often less expensive for consumers than a personal, time-consuming trip to the grocery store. Customers in San Francisco, Austin, Boston, Chicago, Los Angeles, New York City, Philadelphia, San Jose, Seattle and Washington, DC can choose from over 350,000 items from local grocery stores and large chains like Safeway, Whole Foods Market, Shaw's, BJ's Wholesale and Costco. Instacart is disrupting the traditional grocery delivery business with its approach, which utilizes a crowdsourced model of Personal Shoppers who provide their own transportation and smartphones to shop and deliver groceries to customers. This model eliminates the need for costly infrastructure such as warehouses, trucks and full-time drivers. Learn more at www.Instacart.com.
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