SAN FRANCISCO, March 8 Grocery delivery service
Instacart has raised $400 million in its latest financing round,
the startup announced on Wednesday, as investors have started to
show more enthusiasm for a business model whose viability has
long been in question.
San Francisco-based Instacart strikes deals with Whole
Foods, Costco, Safeway and more than 130 other markets to
deliver groceries to consumers. Customers can order groceries
from those stores through the Instacart app, and an Instacart
driver delivers the food in as little as an hour.
Instacart bears a striking resemblance to Webvan, the
well-known Silicon Valley grocery delivery service that went
bust in the dot-com era. For that reason, Instacart has been
under intense scrutiny since its launch in 2012.
But Instacart has found more ways to make money than on just
delivery fees, a famously difficult model. It earns revenue from
coupon sales and promotions sponsored by brands such as Nestle,
General Mills, Coca-Cola, which are displayed in
the app. The company also has a subscription service, similar to
The most recent financing round is the company's largest to
date and was led my Sequoia Capital, Instacart's earliest
venture capital investor and also a backer of the defunct
Webvan. Instacart has to date raised more than $600 million
from investors including Andreessen Horowitz, Whole Foods,
Khosla Ventures and Kleiner Perkins Caufield and Byers.
The company says it operates in 35 markets and plans to
double its footprint this year.
(Reporting by Heather Somerville; Editing by David Gregorio)