Grocery Delivery Service Instacart Announces $265 Million Funding Round

By James White Wednesday, March 3, 2021

California-based grocery delivery startup company Instacart recently announced the closing of a funding round worth $265 million. The round was led by existing investors in the startup ecommerce grocery business, including Andreessen Horowitz, Sequoia Capital, D1 Capital Partners, Fidelity Management and Research Company, and T. Rowe Price Associates.

"Today's fundraising reflects the strength of Instacart's business, the growth our teams have delivered, and the incredible opportunity ahead," said Nick Giovanni, CFO of the startup company. "This past year ushered in a new normal, changing the way people shop for groceries and goods.”

As a result of the latest funding round for the ecommerce business, the company is now valued at $39 billion.

Instacart sign on building.

Instacart Continues to Experience Growth and Investor Approval

Founded in 2012 by entrepreneurs Apoorva Mehta, Brandon Leonardo, and Max Mullen, the startup company has since garnered over $2.4 billion in support of its online grocery business. The ecommerce platform built by the startup business now partners with almost 600 retailers and offers grocery pickup services from over 45,000 locations across the US and Canada.

"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. "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…”

The startup business plans to use the funding from its latest round to bolster corporate staff numbers at the company and invest in various aspects of its marketplace and advertising divisions.

Driving Digital Grocery Sales as Quarantine Continues

Market research expects the global online grocery market to reach $663.33 billion by 2024. Last year, the pandemic caused a significant increase in ecommerce purchases across all industries, leading businesses like Amazon to realize record-breaking revenues. Instacart’s online platform proved to be ahead of its time in this regard, as the startup company offered a convenient way of obtaining groceries while remaining socially distanced.

"We were impressed with Instacart's ability to meet surging demand in 2020 and are excited to further invest," said Dan Sundheim, founder of D1 Capital Partners.

As the industry continues to expand, Instacart will face competition from competing companies in the business such as Postmates, Uber Eats, and DoorDash. DoorDash reported revenues of $970 million for Q4 2020 and boasts a market cap of $51.01 billion.

About the Author

Headshot of James White

James White is a Michigan State University graduate with a BS in Environmental Biology. He is interested in reporting emerging trends in technology, especially with regard to alternative energy and environmental conservation.

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