The latest round valued the online grocery platform at $39 billion.

Online grocery delivery platform Instacart announced on Tuesday its raise of $265 million as part of a new funding round. The company confirmed the round boosted its valuation to $39 billion. Existing investors including Andreessen Horowitz, Sequoia Capital, D1 Capital Partners, Fidelity Management & Research Company LLC, and T. Rowe Price Associates, Inc. participated in the funding. (TechCrunch)

The latest valuation is over twice the valuation of $ 17.7 billion at the time of its previous funding of $ 200 million in October 2020.

Pandemic triggers fund-raising binge

In the company’s words, the pandemic triggered a new normal for millions of people. It turned on its head the way people shop for their groceries and daily needs.

Demand for home deliveries of daily necessities including groceries surged during the pandemic. People were forced to shelter in place, or work out of home, and generally avoided going to stores and malls.

Instacart added more than 200 new retailers and over 15,000 new store locations to its online marketplace to meet surging demand. It expanded its popular same-day delivery and pickup service to new categories such as office supplies, electronics, health, beauty, home decor, sports equipment, and over-the-counter medications.

Prior to the October funding, Instacart raised $ 225 million and $ 100 million in June and July 2020 respectively.

Use of funds

Instacart said it intends to use the new funds to grow its headcount by 50% during the first half of this year.

It also will invest in technology for its Instacart Marketplace, Instacart Advertising, and Instacart Enterprise platforms.

“As online grocery penetration increases over the coming years, Instacart will continue to invest in our people, products, and partners to support all of the communities we serve,” the company said in a statement.

“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.”

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