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Instacart reaches $39 billion valuation with new funding round

Online grocery giant lands another $265 million in capital

Russell Redman

March 2, 2021

4 Min Read
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Instacart said part of the new financing will go toward workforce expansion, including raising the corporate headcount by 50% in 2021.Instacart

E-grocery platform Instacart has upped its valuation to $39 billion with the addition of $265 million from a new round of financing.

The latest funding was led by current investors, including Andreessen Horowitz, Sequoia Capital, D1 Capital Partners, Fidelity Management & Research Co. and T. Rowe Price Associates Inc., San Francisco-based Instacart said Tuesday.

Instacart’s most recently announced financing came in October, when the company landed $200 million as part of a round led by current investors Valiant Peregrine Fund and D1 Capital Partners. At the time, the funding lifted Instacart’s valuation to $17.7 billion.

“Today’s fundraising reflects the strength of Instacart’s business, the growth our teams have delivered and the incredible opportunity ahead,” Nick Giovanni, chief financial officer at Instacart, said in a statement on Tuesday. “This past year ushered in a new normal, changing the way people shop for groceries and goods. While grocery is the world’s largest retail category, with annual spend of $1.3 trillion in North America alone, it’s still in the early stages of its digital transformation. As online grocery penetration increases over the coming years, we’ll continue to invest in our people, products and partners to support all of the communities we serve.”

Related:Instacart taps Facebook exec, former Spotify and Netflix CFO for board

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"While grocery is the world’s largest retail category, with annual spend of $1.3 trillion in North America alone, it’s still in the early stages of its digital transformation." — Nick Giovanni, Instacart

 

Instacart has earmarked the new capital for workforce expansion, including raising the corporate headcount by 50% in 2021, and investment in various operations, including Instacart Marketplace, which connects customers and retailers; Instacart Advertising, which enables consumer packaged goods companies to reach online shoppers; and Instacart Enterprise, which provides retailers with end-to-end e-commerce solutions.

“We were impressed with Instacart’s ability to meet surging demand in 2020 and are excited to further invest,” commented Dan Sundheim, founder of D1 Capital Partners. “We remain bullish about the future of the online grocery space and believe the opportunity in front of Instacart is significant, particularly as the company scales its Instacart Advertising and Instacart Enterprise offerings to help serve its grocery partners.”

In 2020, Instacart added more than 200 new retailers and over 15,000 new store locations to the Instacart Marketplace. The company also expanded its same-day delivery and pickup services to new retail segments, including prescriptions and over-the-counter medicines, office supplies, electronics, health and beauty care, home decor and sporting goods.

Related:Walgreens goes national with Instacart delivery

Last week, Instacart announced a national rollout of same-day delivery with drug chain Walgreens, following chainwide launches with Family Dollar and Meijer.

“Instacart has clearly proved its value for millions of customers, thousands of shoppers, and hundreds of retailers,” stated Andrew Davis, director of private investments at T. Rowe Price. “We are pleased to continue to invest in Instacart to scale its growth plans and bring more benefits to the grocery e-commerce ecosystem.”

The new funding comes to Instacart amid industry speculation about an impending initial public offering. In November, Reuters reported that Instacart has enlisted investment bank Goldman Sachs to lead the IPO, which could be launched in 2021. Then in January, Instacart hired Goldman Sachs veteran Giovanni, a specialist in IPOs and mergers/acquisitions, to succeed Sagar Sanghvi as CFO. And in February, Facebook executive Asha Sharma started at Instacart as chief operating officer, and Fidji Simo, head of Facebook App, and Barry McCarthy, former CFO for Spotify and Netflix, joined Instacart’s board of directors, bringing more digital business acumen to the company.

“Sequoia has been a consistent investor in Instacart since 2013, when we formed our original partnership and the online grocery market was still in its infancy,” Michael Moritz, partner at Sequoia Capital, said in a statement. “Now, eight years later, Instacart, which has delivered groceries and goods for millions of customers across North America, is the category leader and fulfilling its role as a vital service for consumers, a reliable partner for retailers and an effective platform for advertisers.”

Currently, Instacart partners with almost 600 national, regional and local retailers in North America and provides delivery and pickup services from more than 45,000 stores to over 85% of U.S. households and 70% of Canadian households.

“The Instacart team unlocked one of the most operationally complex industries and brought it online to the benefit of the entire grocery ecosystem. As a longtime investor, we’ve been incredibly impressed by the team’s resilience and how they met the moment of 2020,” commented Jeff Jordan, managing partner at Andreessen Horowitz. “We believe this is just the beginning for online grocery and Instacart is well-positioned to continue to lead in this emerging space.”

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About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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