Instacart

Sector: E-com/New Com Countries of operation: US and Canada Key product categories: Online order and delivery service Summary Privately owned Maplebear Inc., which operates under the brand name Instacart, provides online delivery and pickup services in the US and Canada. It was founded in 2012 and is headquartered in San Francisco, California. The service allows customers to order groceries and other goods from nearby participating retailers—a network of personal shoppers then picks up and delivers the orders. As of June 2021, Instacart has partnered with more than 600 retailers to deliver from over 45,000 stores across 5,500 cities in North America. The delivery service is available to more than 85% of US residents and 80% of Canadian households, according to the company. Instacart also provides white-label services including apps, delivery solutions and websites to power retailer’s e-commerce platforms. Company Analysis Coresight Research insight: The Covid-19 pandemic has fueled an unprecedented surge in demand for online grocery in the US. Social distancing and self-quarantine have spurred consumers to turn to online grocery shopping in far greater numbers than ever before. Furthermore, according to Coresight Research’s US online grocery survey undertaken in April 2021, after the pandemic a substantial 60% of online grocery shoppers plan to buy groceries online either more frequently than or at the same frequency as during the crisis. The strong uplift in online grocery demand has benefitted Instacart. The company saw a dramatic spike in delivery orders and rapid growth in its retail partner base during the pandemic. To help meet increased demand, it has accelerated its technological investments to achieve greater operational efficiency and improve its customer service. With many retailers looking to prioritize their online strategy amid the pandemic, Instacart is also rapidly adding new retail partners outside its core grocery business, including H&M (apparel), Sephora (beauty), Big Lots (general merchandise) and Costco (prescription delivery). Diversification to other markets may prove essential, if grocery retailers that outsource delivery and pickup services to Instacart seek to bring more last-mile operations in-house and build their own e-commerce infrastructure going forward. Globally, the online grocery market is seeing more retailers take greater control of last-mile logistics compared to nonfood retailers, including owning fleets of delivery vehicles.

Tailwinds

Headwinds

Pandemic-driven surge in online grocery shopping coupled with structural shifts to e-commerce Same-day delivery model and contact-light delivery service Instacart reportedly hit the first profitable year in 2020, generating $50 million in profits. Opportunities to form partnerships with new retailers (including outside of grocery) and broaden collaborations with existing retail partners Opportunities for sustained expansion outside of the US and Canada

Heightened competition from rivals such as Amazon Fresh and Shipt, as well as entry of prepared food delivery companies DoorDash and Uber Eats in the grocery delivery market Risk that US grocery retailers may seek to bring more picking and fulfillment in-house as they develop their e-commerce capacities

  Company Developments

Date	Development
May 27, 2021	Instacart rolls out its 30-minute Priority Delivery service at more than 300 stores in 15 major US cities.
March 2, 2021	Instacart announces that it has raised $265 million in a new financing round led by existing investors including Andreessen Horowitz, Sequoia Capital and Fidelity Management & Research Company LLC.
February 4, 2021	Instacart and Dollar Tree-owned Family Dollar announce a partnership that will see Instacart deliver items from the discount chain’s more than 6,000 stores across the US.
October 22, 2020	Instacart teams up with Aldi to offer Supplemental Nutrition Assistance Program (SNAP) participants access to fresh food and pantry staples from Aldi stores via Instacart’s delivery and pickup services.
October 19, 2020	Instacart announces a nationwide rollout of a same-day delivery service for Sephora’s beauty and wellness products. Instacart partnered with Sephora in September to launch the delivery pilot at selected Sephora stores in California and Canada.
October 13, 2020	Instacart partners with H&M Canada to offer same-day delivery of apparel to consumers living close to an H&M store in Alberta, British Columbia, Ontario and Saskatchewan.
October 8, 2020	Instacart announces that it has raised $200 million in a new funding round from existing investors Valiant Peregrine Fund and D1 Capital Partners, increasing the company’s valuation to $17.7 billion. Instacart raised $225 million in June and $100 million in July, with the latest round marking the third big capital infusion since the onset of the pandemic in the US.
September 3, 2020	Instacart announces partnership with 7-Eleven to offer same-day delivery of groceries, alcoholic beverages and over-the-counter medicines from 7-Eleven’s more than 750 stores across five US states.
August 25, 2020	Instacart announces its partnership with nutritional products retailer The Vitamin Shoppe to provide same-day delivery of health and wellness products from over 720 The Vitamin Shoppe and Super Supplements retail locations across US.
July 14, 2020	Instacart partners with grocery retailer Food Lion to provide a same-day delivery service from Food Lion’s 302 stores in Maryland, North Carolina, South Carolina, Virginia and West Virginia.
June 8, 2020	Instacart teams up with Big Lots to launch same-day delivery from over 1,400 Big Lots stores across the 47 states where the retailer operates. Products available through the service include groceries and everyday essentials as well as décor, home goods, kitchen and dining, office supplies and other items.
April 16, 2020	Instacart announces its entry into prescription delivery services through a partnership with Costco. The delivery service will be available from nearly 200 Costco locations across seven US states and the District of Columbia, with plans to expand nationwide in the near future.

  Management Team

• Apoorva Mehta—CEO
• Sagar Sanghvi—CFO
• Nilam Ganenthiran—President

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Source: Company reports/S&P Capital IQ