Grocery delivery service Instacart has pulled in $950 million in funding so far in 2018, the new total after the San Francisco-based company raised $600 million in its latest funding round.
D1 Capital Partners, run by Dan Sundheim, the former investment chief at Viking Global Investors, led the financing round. The investment raises Instacart’s valuation to $7.6 billion and provides more funding as the company battles Amazon for control of the grocery delivery market.
“The U.S. is nearly a $1 trillion grocery market, and last year we saw almost every major grocer in North America bring their delivery business online in a significant way. We believe we’re in the very early stages of a massive shift in the way people buy groceries and we expect that one in five Americans will be shopping for their groceries online in the next five years,” said Apoorva Mehta, Instacart’s CEO.
Instacart expects to deploy the new capital in several ways, including further expansion in North America, marketing investments to increase awareness of the service at retail partners’ stores, and recruiting engineering and product development talent. The company has partnerships with retailers such as Kroger, Sam’s Club, Aldi and Publix, and has a presence in all 50 states.
“Grocery is the largest category within U.S. retail and it is also one of the least penetrated online,” Sundheim said. “The industry is at a tipping point and there will likely be a significant acceleration in the adoption of online ordering for grocery delivery over the next few years. We believe that traditional retailers will lead the category online, as their brick-and-mortar stores are the most effective distribution centers for fulfillment of online grocery orders.”
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