Instacart, the well-funded on-demand grocery startup, was not looking for more cash, says CEO Apoorva Mehta. But when cash came looking for Instacart, the company didn’t turn it down. It’s announcing a new $600 million funding round led by D1 Capital. That’s on top of $900 million in previous funding; the company’s valuation is now $7.6 billion, up 75% in six months.
Mehta says that Instacart will invest its new millions on new initiatives such as doubling its engineering team by the end of next year and further expanding its presence in Canada. It’s also in the process of hiring 300 people for an Atlanta office that provides support to the company’s shoppers. “We recognize that we need to be much better for our shoppers,” says Mehta–in the past, some of these contractors have sued the company and tussled with it over tips from customers. “The work we’re doing in Atlanta is just one step.”
Now 50,000 Instacart shoppers deliver groceries from 15,000 stores in 4,000 cities, and the company has signed up more than 300 grocery partners as it does battle with giants such as Amazon and Walmart. But Mehta says that most of Instacart’s potential growth is still to come. “What we see ahead of us is an extremely large opportunity,” he tells me. “Nearly $1 trillion in groceries are bought every year in the U.S. and Canada alone. Less than 5% of that is bought online.”
Seventy percent of U.S. households could be using Instacart—they live in areas it services—and the company plans to increase that coverage to 80% by the end of the year. Though the service got its start in big markets, “it also thrives in markets like Anchorage, Alaska, or Buffalo, New York,” says Mehta. “We’ve been continually surprised at how much demand there is.” Part of the trick of capturing more of the 95% of grocery shopping still done the old-fashioned way, he adds, is simply to spread awareness that a service like Instacart exists—another goal that’s easier to accomplish with $600 million more in the bank.