E-commerce experienced an unprecedented explosion during the Covid-19 pandemic. Worldwide sales reached nearly $27 billion in the first year of containment.

Instacart, although already well known for its unique business model, has taken advantage of the health crisis and the e-commerce boom to further develop its business and become a unicorn now valued at over $39 billion. 

What is Instacart? 

Instacart is an American delivery platform operating in the FoodTech sector. Founded in 2012 by Apoorva MehtaInstacart, based on a sharing economy model, has become one of the most promising companies on the American continent.

The principle is simple: Instacart uses a mobile application to deliver groceries to customers. Customers make their shopping list, and delivery drivers take care of the shopping and delivery.

Unlike other applications, the platform has no warehouse. It acts solely as an intermediary between customers and street-front stores.

Valued at $39 billion in March 2021the start-up is poised to become a major money-spinner for investors.

Instacart, the start-up that revolutionized delivery

Instacart works a bit like the UberEats app. After installing the app on your mobile, you enter your zip code and the platform will suggest participating businesses near your home.

The advantage is that you can consolidate your purchases into a single order, whether it's food products, school supplies or even pharmaceutical products.

Delivery drivers take care of ordering and home delivery. They visit several shops simultaneously.

Delivery in less than an hour. This saves users the hustle and bustle of large retail chains.

Instacart Business Model 

Instacart's business model works by partnering with grocery stores or retail chains and connecting delivery drivers/buyers directly with customers.

User boom during containment 

The platform, already familiar to American households, exploded during the confinement. By 2020, 57% of online shopping in the U.S. was done via Instacart.

The app's popularity is due in no small part to the fact that the user experience, which is as close as you can get to ordering in person.

For example, users of the application can select the ripening status of fruit and vegetables, and interact in real time with the delivery driver/buyer in charge of the order.

In addition, each item found by the buyer is ticked off on the application, enabling the user to track the employee's purchases in real time.

Orders are impressive, with few product substitutions, appealing to families and singles alike.

Instacart's cutting-edge technology is no stranger to record numbers of users every day.

By 2020, there were almost 10 million active users.

Difficult working conditions for delivery drivers/buyers 

Most shoppers, also known as "personals shoppers "personals shoppers work with Instacart to supplement their income. The application allows anyone to become an occasional delivery person and work flexibly. Delivery drivers/buyers rely on tips from users of the platform to round off the monthly amount received from the company.

Nonetheless, they face a more or less difficult situation. The job isn't as easy as it looks. Most users of the application generally send the platform's employees to the most crowded stores, like Costco in Canada and Walmart in the US. This leads to long queues at the checkout.

Many spend most of their time in the chains instead of making deliveries.

One consumer idea is to send deliverymen/buyers out to do their shopping at peak times, and if the employee takes too long to deliver, the tip is taken away. Added to this, unavailable products and customers unhappy about waiting. As a result, many casual employees quit their jobs. Work is paid by the job.

Instacart's thundering expansion in the US and Canadaand Canada

Instacart was initially launched in 2012 in San Francisco before conquering Chicago, Boston, Atlanta, Miami and Washington in 2015.

It wasn't until the following year that the company extended its offer to Orange County and Minneapolis.

In 2020, Instacart has already conquered 18 American states. The arrival of Fiji Simo in July 2022 marks the app's expansion into 10 more states, including Colorado, Hawaii, Idaho, Louisiana, Montana, New Mexico, Oregon, Utah, Washington and Wyoming.

November 2017 marks Instacart's arrival in Canada, the only foreign country to be conquered by the company. Toronto and Vancouver are the first cities covered, followed by Quebec in mid-2018, for a total of 18 Canadian markets, all provinces combined.

Instacart has not yet begun its worldwide expansion.

A large number of investors for a $39 billion valuation 

To become what it is today, the unicorn valued at over $39 billion called on the help of investors who weighed heavily in the balance.

Investments and fundraising

The unicorn's first round of financing took place in 2017 for a sum a total of $400 million and a valuation of $3.4 billion.

On October 16, 2018, Instacart officializes a fundraising round worth. 600 million (invested by D1 capital Partners).. This is in addition to the $200 million raised earlier this year by Coatue Management and Glade Brooke Capital Partners. For a total valuation of 7.6 billion dollars.

At the end of 2018, Instacart raised a further 271 million dollars from :

• Andreessen Horowitz 
• Sequoia capital
• Kleiner Perkins
• Comsat Ventures 
• Thrives Capital 
• Coatue Management 
• Valiant Capital 
• T. Rowe Price...

Bringing the total valuation to 7.87 billion.

In October 2018, the company raised $200 million, reaching a valuation of $17.7 billion.

In March 2021, a new round of financing of 265 million dollars, bringing the company's a valuation of $39 billion.

Initial public offering 

According to the Wall Street Journal, Instacart plans to focus on selling employee shares when it goes public.

In May 2022, the application stated thata confidential file had been filed with the U.S. Securities and Exchange Commission to go public.

This was shortly after having reduced its valuation by 40% following the various market turbulences. The latter came as Russia's invasion of Ukraine and soaring global interest rates forced many investors to abandon their support for IPOs.

Fidji Simo, a Frenchwoman and former No. 3 of the Facebook application, has been appointed head of the company. Having handed over the reins to Apoorva Mehta, she could be responsible for the company's IPO.

A promising future? 

In 2020, according to a Bloomberg report, sales reached $35 billion, placing Instacart just behind Walmart and Amazon in terms of popularity among grocery delivery services.

In August 2020, and according to Second Mesure, sales were up 234% year-on-year.

Earnings for the third quarter of 2021 were 30% up on the same period last year.

However, the company suffers from volatile financial markets. 

This year, for the third time, the grocery delivery specialist has lowered its valuation, reduced to $13 billion by 2022, according to the information website.

This is three times less than the figure posted 18 months ago at the end of the last fund-raising.

But Instacart has the potential to continue growing in the coming years, provided it stays true to its core values: speed of delivery and customer service to match.

Other companies in the advertising and delivery sector, such as Shopify, Meta and DoorDash, have also seen their share values fall.

With an IPO imminent, Instacart's future looks very bright.

Instacart: key information 

18,000 customer service agents and 600,000 delivery personnel/buyers.

Sales in 2020 are expected to reach $39 billion.

Steps underway. According to Fidji Simo, Instacart's IPO in 2022 remains unlikely.

Instacart is one of the most important FoodTech applications at the moment. 

Although it experienced a massive growth boom during the global containment of the pandemic, it has yet to secure its place in the retail world. its place in the retail world. Having a significant impact in this type of business, it will need to use strategists and the emergence of new ideas to become even more involved in the field.

Another objective is to attract more grocery stores that are not among its partners. 

Instacart offers users and consumers a convenient and affordable way to have fresh groceries delivered to and picked upfrom their favorite local retailer in less than an hour.

The company has teamed up with 500 regional, national and local retailers to deliver to 40,000 physical stores across the USA and Canada.

However, it may want to expand beyond these two countries and conquer the world. With the arrival of Fidji Simo at the head of the company, it is highly likely that Instacart to develop its strategy in other sectors, such as advertising.

Instacart's cores values are numerous.

"Go far together", "Grow the pie", "Roll up your sleeves", "Put it all on the table" and "serve generously" translate as "Go far together" "Grow the pie" "Roll up your sleeves" "Put it all on the table" "Serve generously".