Fast growing grocery delivery company Instacart said Monday that it has raised $44 million in a Series B financing led by tech investors Andreeson 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.
Apoorva Mehta, Instacart’s founder and CEO, said the financing would be used to accelerate geographical expansion; improve customer experience; experiment with new delivery models and improve its proprietary technology.
Instacart uses a crowdsourced force of “personal shoppers” who shop for and deliver grocery orders in as little as an hour. It is available in 10 cities currently with plans for up to 17 markets by the end of the year, Mehta said.
The company has raced past a goal set at the time of its Series A financing a year ago to expand to 10 cities by the end of 2014.
"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," Jeff Jordan, a partner at Andreessen Horowitz, said in a statement. "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."
"We've proven out our model in 10 cities across the U.S., and it works," Mehta added. "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 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 — a $99 annual membership that eliminates delivery fees for all orders of $35 or more.
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