Unicorns 41/229 – Instacart
Founders: Apoorva Mehta, Brandon Leonardo, Max Mullen
Key people: Apoorva Mehta (CEO)
Number of employees: ~500
Instacart’s service is mainly provided through a smartphone app, available on iOS and Android platforms, apart from its website. Customers can pay with Android Pay and Apple Pay on their respective platforms. Initially Instacart shoppers simply went to a store and purchased the ordered items at retail and, in addition to the delivery charge, added a markup of 10 to 20 percent. As the business has developed, the firm has established relationships with grocery firms which share their (store) existing markup, allowing Instacart users to shop at in-store prices.
Instacart was started by Apoorva Mehta, a former Amazon employee. The company launched its service in San Francisco, Mountain View and Palo Alto. The startup company has a $2 billion valuation by investors as of May 2015. Investors includ e Kleiner Perkins Caufield & Byers (KPCB), Comcast Ventures, Dragoneer Investment Group, Thrive Capital, Valiant Capital, Andreessen Horowitz, Khosla Ventures, Sequoia Capital, Y Combinator and Angel Investor Martin Romero. As of January 2015, total funding was about $275 million. At that time, Forbes named Instacart “the Most Promising Company in America”. In 2016, Whole Foods Market Inc. invested in Instacart in conjunction with its partnership.
In April 2015, the firm had about 200 employees. Actual shopping and delivery is done primarily by independent contractors, though a new policy will allow some Instacart shoppers to choose to be part-time employees. During 2014, Instacart expanded to 15 cities: Atlanta; Austin; Boston; Boulder; Chicago; Denver; Houston; Los Angeles; New York City; Philadelphia; Portland, Oregon; San Francisco; San Jose; Seattle and Washington, DC, with plans to expand further in 2015. In September 2015, the company hired Ravi Gupta as its first CFO.
In September 2016, the company announced an expansion to their North Chicago Zone and in October 2016, also expansion of their Orange County and Minneapolis coverage areas. As of March 2017, Instacart services 36 markets, composed of 1,200 cities in 25 states: Arizona, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Washington. In March 2017, it was reported that Instacart raised a massive new funding round] of $400 million dollars in new venture capital which valued the grocery delivery service at approximately $3.4 billion dollars.