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Founded in 2012, Instacart is an American technology company valued at nearly $8 billion that operates as a same-day grocery delivery and pick-up service in the U.S. and Canada.[2][3]

Instacart
Instacart logo and wordmark.svg
Type of site
Private
Founded2012; 7 years ago (2012)
HeadquartersSan Francisco, California, U.S.
Area served5,500 cities in the U.S. and Canada
OwnerMaplebear Inc.[1]
Founder(s)Apoorva Mehta, Max Mullen, Brandon Leonardo
Key peopleApoorva Mehta (CEO)
IndustryRetail
ServicesGrocery Delivery
Websiteinstacart.com
instacart.ca
Native client(s) oniOS, Android

Customers shop for groceries through the Instacart mobile app or Instacart.com from the company's more than 300 national, regional and local retailer partners.[4] The order is shopped and delivered by an Instacart personal shopper. Up until the end of 2017, Instacart only had operations and services in the United States.

In November 2017, the company announced plans to also begin delivery in Canada.

Today, Instacart is accessible to more than 80% of U.S. households, and in all 50 states, and 70% of Canadian households.[5] Instacart partners include Albertsons, ALDI, Costco, CVS, Kroger, Loblaw, Publix, Sam's Club, Sprouts and Wegmans, among others. The company serves more than 20,000 different grocery stores across more than 5,500 cities in North America.[6][7]

ServiceEdit

Instacart's customers can access the service via the Instacart mobile app or website and begin shopping by selecting their city and store, then adding groceries to their digital cart. Customers can pay with personal debit or credit cards, Android Pay and Apple Pay.

As the business has developed, Instacart has established partnerships with over 300 national, regional and local retailers.[8] Instacart personal shoppers pick, pack and deliver the order within the customer's designated time frame—within one hour or up to five days in advance.[9][10]

For orders of $35 or more, the delivery fee is $3.99. With an Instacart Express membership for $9.99/month or an annual fee of $99, customers get unlimited, free delivery on orders over $35. Retail partners set the price of individual items on the Instacart marketplace. Today more than half of Instacart partners offer customers same as in-store pricing on the platform.[11]

On April 11, 2019, the company expanded its services to offering an on-demand option for its workers, in order to allow workers to work more flexible schedules.[12]

Today, Instacart is available in more than 5,500 cities across the U.S., including all 50 states, and Canada.[13][14]

HistoryEdit

Apoorva MehtaEdit

Instacart was founded in 2012 by Apoorva Mehta, a former Amazon employee.[15][16][17] Apoorva was born in India and moved with his family to Canada in 2000.[18] He studied engineering at the University of Waterloo.[19] He was a participant in Y Combinator's Summer 2012 batch which eventually led to the creation of Instacart.[20] Apoorva previously worked at Blackberry, Qualcomm, and then Amazon as a supply chain engineer, where he developed fulfillment systems to move packages from Amazon’s warehouses to customers’ homes.[21] Before founding Instacart, Apoorva started more than 20 companies. He tried building an ad network for social gaming companies, and developing a social network specifically for lawyers, among other start-ups.[22]

North American ExpansionEdit

Instacart was originally launched in San Francisco and since then has expanded throughout the U.S. and Canada.[23][24][25][26]

In September 2016, the company announced an expansion to their North Chicago Zone,[27] and in October 2016 also announced the expansion of their Orange County and Minneapolis coverage areas.[28][29]

As of March 2017, Instacart serviced 36 markets, composed of 1,200 cities in 25 states: Arizona, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Texas, Virginia, and Washington.[30]

PartnershipsEdit

In November 2017, Instacart announced a partnership with Loblaw Companies to begin delivery from select Loblaws, Real Canadian Superstore, and T&T Supermarket locations in Toronto and Vancouver.[31][32] By the end of 2018, Instacart will deliver from these banners in 16 Canadian markets.[33] They also offer delivery for products at Walmart Canada stores, Staples Canada and M&M Food Market.[34]

In January 2018, the company acquired Toronto-based Unata, a white-label platform for grocers.[35]

In 2018, Instacart announced national expansions with Kroger, ALDI, Sam's Club, Publix, Costco, Sprouts, Stater Bros, BJ's Wholesale Club, and more. The company announced new partnerships in 2018 with Walmart Canada, HyVee, The Fresh Market, Harps, Lunds & Byerlys, and more.[36][37]

In November 2018, Instacart announced the national expansion of Instacart Pickup, a new grocery click-and-collect service.[38]

In December 2018, Whole Foods, which had been bought by Amazon in 2017, and Instacart announced they would be winding down their relationship.[39]

In March 2019, Instacart announced an expanded alcohol delivery experience for customers across the U.S., making Instacart one of the largest online delivery and pickup marketplaces for alcohol in the U.S.[40]

In May 2019, Whole Foods Market ended its partnership with Instacart.[41]

ControversiesEdit

In March 2017, Instacart agreed to pay a $4.6 million class action settlement stemming from the alleged misclassification of its shopper employees as independent contractors. The suit alleged 18 violations, including improper tip pooling and failure to reimburse workers for business expenses.[42]

In November 2016, the company temporarily removed the option to leave a gratuity. Backlash against the policy forced the company to reinstate the option only weeks later.[43]

In November 2017, some Instacart workers participated in a strike action, alleging wages as low as $1 an hour. Instacart claimed that the strike had no impact on its operations.[44]

In February 2018, Instacart mistakenly withheld tips given by customers to shoppers, blaming a software bug. In addition, customers were often charged for service fees that were supposed to be waived.[45]

In April 2018, Instacart instituted a controversial 5% service fee on all orders.[46]

In November and December 2018, Instacart instituted a new pay system for its shoppers; shoppers claimed this pay system resulted in substantially lower pay. As shoppers boycotted the lower-paying orders, Instacart customers posted on social media that their orders were being delayed.[47][48][49]

After an online organizing campaign in which shoppers posted examples of payments as low as eighty cents per delivery attracted media and customer attention, Instacart announced in February 2019 that it would revise its pay system and give back pay to some workers.[50][51] Under the new pay system, tips were no longer factored into the minimum base wages, which were newly set at $7–10 for a full-service shopping order (based on delivery market) and $5 for delivery only.[52][53]

FundingEdit

The company had a $2-billion valuation by investors as of May 2015.[8] Forbes named Instacart "the Most Promising Company in America" that same year.[54]

In March 2017, it was reported that Instacart raised $400 million in new venture capital which valued the grocery delivery service at approximately $3.4 billion.[55][56]

In February 2018, the company raised $200 million in a funding round led by Coatue Management, as well as Glade Brook Capital Partners and existing investors.[57] In October 2018, Instacart raised $600 million in a funding round led by hedge fund D1 Capital Partners; the round valued the company at $7.6 billion.

Instacart raised an additional $271 million in November from investors including Tiger Global Management, bringing its latest round of fund raising to $871 million and valuation to $7.87B.[58] Instacart has raised six rounds of funding, and has been invested in by Andreessen Horowitz, Sequoia, Kleiner Perkins Caufield & Byers, Comcast Ventures, Thrive Capital, Coatue Management, D1 Capital Partners, Tiger Global and Valiant Capital, among others.[59]

ReferencesEdit

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