Instacart is a mobile grocery delivery service that has been operating since 2012. Through a mobile interface, customers can choose a basket of grocery items that are delivered to their home in the same day by a “personal shopper.”
Instacart was co-founded by Max Mullen, who is a USC Marshall Alumni who has gone through the entrepreneurship program.
As of writing this, 80% of homes in America are able to take advantage of this service, which is possible through Instacart’s focus on increased coverage. Earlier this year, Instacart expanded their services to allow for alcohol delivery. This is not only a huge revenue growth opportunity, but also a way to help decrease injuries and deaths through intoxicated driving.
Even though Instacart was one of the first grocery delivery services, they have been facing considerable competition as many larger companies are trying to inhabit the space. Amazon, Target, and Walmart are all providing a similar service that has advantages over Instacart due to the synergies they can provide with their current supply chains.
Instacart is also considered Y-Combinator’s 5th most successful company to ever go through its program. Y-Combinator is the most respected accelerator for startups and helps provide the companies with the resources to succeed. After going through this program in 2012, Instacart took off and began gaining both funding and publicity.
By 2015, Forbes had labeled Instacart as “the most promising company in America” while they were already at a $2 billion valuation within just 3 years of their trip through Y-Combinator.
Instacart has been successful in their endeavors and is approaching a $10 billion dollar valuation. They are one of the largest startups right now and many consider their next best move is to go public.
In October 2018, Instacart raised $600 million in a Series F round. CEO Apoorva Mehta said that they did not necessarily need the cash, but had the opportunity to raise the capital at a fair price and took the chance.
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They are currently flushed with cash, having not used most of their funds from their past two rounds, giving them a lot of room to plan on new expansion methods.
One reason many believe they have not gone public yet is that they simply do not need to. With the failure of many tech IPOs this year, Instacart has no reason to rush into the process. They have an abundance of capital and do not need the risks associated with going public, which include accounting and regulatory costs as well as increased scrutiny from investors.