Instacart raises $265M from existing investors, its valuation doubles to $39B

On-demand grocery delivery platform Instacart has secured $ 265 million in a new funding round from Andreessen Horowitz, Sequoia Capital, D1 Capital Partners and other existing investors. The company’s valuation reached $ 39 billion with the new investment. 

Instacart raised $200 million in October, and the company’s valuation after that funding round was announced as $ 17.8 billion.

“Today’s fundraising reflects the strength of Instacart’s business, the growth our teams have delivered and the incredible opportunity ahead,” said Nick Giovanni, Chief Financial Officer for Instacart. “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.”

The company stated that it wants to increase its headcount by 50% in 2021, as well as continue to scale and invest in advertising. 

Instacart has developed itself on the product side and has begun delivering a wide range of products on the same day, including prescription medicines, electronics, home décor, fitness and exercise equipment, and more.

According to Pitchbook, Instacart is now the second largest U.S.-based unicorn, behind SpaceX, Elon Musk’s space start-up that’s valued at $74 billion.

“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 long time investor, we’ve been incredibly impressed by the team’s resilience and how they met the moment of 2020,” said 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.”

Also read: Turkish delivery company Getir raises $128 million at $850 million valuation

The company stated that, today, Instacart partners with nearly 600 national, regional and local retailers, including unique brand names, to offer delivery and pickup services from more than 45,000 stores to over 85% of U.S. households and 70% of Canadian households. In 2020, the company added more than 200 new retailers and more than 15,000 new store locations to the Instacart marketplace. 

“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,” said Michael Moritz, Partner at Sequoia Capital. “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.”

The new funding round was led by Andreessen Horowitz, Sequoia Capital, D1 Capital Partners, Fidelity Management & Research Co and T. Rowe Price Associates.

Instacart has also been preparing for an initial public offering and Goldman Sachs Group will reportedly lead the IPO.