A new player may soon challenge Amazon’s hold on the grocery delivery business. San Francisco-based Instacart has recently beefed up its war chest with another infusion of funds from its latest round of financing activity.
Instacart reportedly raised $200 million in a fundraising campaign led by investment firms Coatue Management and Glade Brook Capital Partners. The company, which is known for its grocery delivery service, is now valued at $4.2 billion, a sharp rise from its March 2017 valuation of $3.4 billion.
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With the recent capital infusion, Instacart has now received a total of almost $900 million in funding from investors which include big names in the financial market such as Andreessen Horowitz and Sequoia Capital. However, one big investor that failed to participate in the company’s latest financing round is Whole Foods.
Whole Foods is one of Instacart’s big shareholders and major partners. However, since it was acquired by Amazon in June of 2017, its relationship with Instacart can only be described as complex as they will now essentially be competitors in the same market.
Just last week, Amazon commenced testing on a two-hour delivery service of groceries purchased from Whole Foods. The service will be available to Amazon Prime members and will initially be available in the Austin, Cincinnati, Dallas and Virginia Beach areas. However, the company plans to expand the service coverage for the entire continental U.S. before the end of 2018.
Despite its relatively small size, Instacart is confident that it will be able to compete with Amazon by forming alliances with more grocery stores. In fact, co-founder and CEO Apoorva Mehta announced big plans for the raised capital, which includes expansion outside the U.S. and Canadian markets as well as the addition of new businesses beyond delivery.
[Featured Image via Instacart]