Instacart's Growth Draws $225M in New Funding

Fueled by unprecedented demand for its online grocery delivery service since the start of the pandemic, Instacart has raised $225 million as part of a new financing round led by DST Global and General Catalyst, with existing investor D1 Capital Partners participating. The announcement increases the San Francisco-based company’s valuation to $13.7 billion.

With order volume up as much as 500% year over year, Instacart expects the cash infusion will allow the company to more deeply invest in its operational and technical infrastructures to help meet the increased customer demand for grocery delivery and pickup. 

“COVID-19 created a massive shift for the grocery industry and forever changed how people view the necessity of on-demand services,” said Apoorva Mehta, founder and CEO of Instacart, in a release. “We have ambitious plans for the future and this new investment enables us to deepen our support for our shoppers and partners, further fund strategic initiatives such as our advertising and enterprise businesses, and continue to deliver exceptional experiences for customers.”

Today, Instacart is accessible to more than 85% of households in the U.S., across all 50 states, and more than 70% of households in Canada. The company, which has announced partnerships with C&S Independent Grocers and Big Lots in the last week, has accelerated its launch cadence with retailers since the start of the year, and now partners with more than 400 national, regional and local retailers across more than 30,000 stores in the U.S. and Canada.

“It’s been remarkable to watch the Instacart team, in these unprecedented times, not only successfully scale its operations and technology to serve customers, but also provide earning opportunities for hundreds of thousands of shoppers, as well as continued business for its retail partners,” Saurabh Gupta, managing partner with DST Global, said in a statement. 

In addition to groceries and everyday goods, the company has also expanded its offerings over the last year to include alcohol and prescription delivery and pickup services.

“That Instacart was able to meet an unprecedented increase in consumer need over the past several challenging months is just one of many signals of the company’s operational excellence. “We’ve been following this team since the beginning and, today, we’re proud to partner with Instacart as they continue to build the service,” said Kyle Doherty, managing director with General Catalyst Endurance fund.

As Instacart looks ahead, it expects to deploy the new capital in a number of ways, including continuing to support its growing shopper community with new services and features; further investing in key businesses such as Instacart Advertising and Instacart Enterprise; and further scaling its operational and technical teams to help meet the increased customer demand for grocery delivery and pickup. 

“Instacart’s response to COVID-19—refocusing the company to meet the rapid shift in needs of customers, shoppers and retailers—has strengthened our conviction in its capacity to lead this important industry in partnership with brick-and-mortar retailers,” said Dan Sundheim, founder of D1 Capital Partners. “We continue to believe that consumer adoption of online grocery will grow substantially in the coming years and are proud to deepen our investment in Instacart at this time.”