The leading US-based on-demand, crowd-sourced grocery delivery company, Instacart, has raised $225m as part of a new financing round. This investment increased the valuation of the company to $13.7bn.
Online grocery delivery accelerated by COVID-19
This latest round was led by DST Global and General Catalyst, with existing investor D1 Capital Partners participating. It comes as the company continues to gain significant share in the channel as customer demand for online grocery delivery remains at an elevated level. For many consumers, receiving their grocery deliveries at home is preferred to visiting physical stores during the current phase of the COVID-19 pandemic.
Doubled community of shoppers
To meet this demand, Instacart has recently doubled the size of its shopper community to more than 500,000 people. It currently works with more than 400 retailers, operating from a network of over 30,000 stores in the US and Canada. The service is currently accessible to more than 85% of households in the US and more than 70% of households in Canada.
Funding will support new strategic initiatives
Recent reports have indicated that Instacart has been one of the main beneficiaries of the growth in online retailing during the COVID-19 pandemic. Bloomberg reports that the business is on-track to process more than $35bn in sales this year. It continues to launch new services including prescription delivery, recently partnering with Costco in this area, alcohol delivery and meal delivery. The new investment will also support the growth of strategic initiatives including Instacart Advertising and Enterprise.
Key account focus
For many CPG suppliers, Instacart is becoming an important account to support directly, particularly following the launch of its digital advertising proposition. This enables companies to target their spend and measure ROI effectively. Increasingly, CPG companies are engaging more with marketplaces and other digital platforms, especially those working with many of their existing retail customers, cutting across traditional account structures.
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