Instacart said Wednesday that it has closed $8.5 million in Series A funding. The lead investor was Sequoia Capital. Khosla Ventures, Canaan Partners, SVAngel and Paul Buchheit, creator of Gmail, also participated in the round. Also, Michael Moritz, chairman of Sequoia and former board member of Webvan, joins Instacart’s board of directors. Instacart is a provider of grocery store delivery.
San Francisco, Calif. – July 10, 2013 – Instacart (www.instacart.com), the only service that can deliver groceries from multiple local stores within an hour, announced today that it has partnered with Sequoia Capital and raised $8.5M in Series A funding. The round was led by Sequoia with additional participation from Khosla Ventures, Canaan Partners, SVAngel and Paul Buchheit, creator of Gmail. Michael Moritz, chairman of Sequoia and former Board member of Webvan, has joined the Instacart Board of Directors.
Instacart plans to use the proceeds of this round to fund expansion beyond San Francisco, with a goal of being in at least 10 major cities across the U.S. by the end of 2014.
“Having been involved in Webvan, Sequoia is painfully familiar with what it takes to be successful in the grocery delivery business,” said Moritz. “Until we encountered Instacart, we had still been receiving outpatient therapy for our Webvan fiasco but the doctors say – and we agree – that because of advances in technology and a most imaginative approach, there is little danger of a relapse. Apoorva and his team are the first to have cracked the code on how to make same-day delivery great for customers and all other stakeholders.”
Instacart’s model relies on a crowdsourced labor force dubbed “Personal Shoppers” who shop for and deliver grocery orders using their own vehicles in as little as one hour. This eliminates the need for costly infrastructure such as warehouses, trucks and full-time drivers. Instacart keeps careful track of the price, location and availability of thousands of individual grocery items in the local stores in which it shops, to help its Personal Shoppers be as efficient as possible and enable rapid delivery.
“We’re really excited to be working with the Sequoia team, who bring extremely valuable and relevant experience to the table,” said Apoorva Mehta, CEO and founder of Instacart. “Now that we have our San Francisco operation up and running and we have a great formula for success, it’s time to turn our attention to national expansion.”
Instacart plans to target other dense urban areas for its service – cities such as New York, Chicago and Boston where convenience is valued, many residents don’t have cars, and the crowdsourcing model is already familiar and accepted.
Consumers can sign up for their free Instacart accounts at www.Instacart.com. The service is currently available in San Francisco, Oakland, Berkeley, Mountain View, Palo Alto, Menlo Park and Sunnyvale, Calif. Earlier this month, Instacart launched Instacart Plus, a new option that offers customers the lowest possible prices on national-brand grocery items, making grocery delivery less expensive than going to the store yourself.
About Sequoia Capital
Sequoia Capital helps founders turn imaginative ideas into enduring companies. As the “Entrepreneurs Behind the Entrepreneurs,” the Sequoia team has worked closely with legendary founders such as Steve Jobs of Apple, Larry Ellison of Oracle, Len Bosack and Sandy Lerner of Cisco, David Filo and Jerry Yang of Yahoo!, Max Levchin, Elon Musk and Peter Thiel of PayPal, Sergey Brin and Larry Page of Google, Steve Chen and Chad Hurley of YouTube, and Reid Hoffman and Jeff Weiner of LinkedIn. Sequoia is now helping the next generation of innovators build the lasting companies of tomorrow.
Instacart is the only service that can deliver groceries from multiple local stores within an hour, and is often less expensive for consumers than a personal, time-consuming trip to the grocery store. Customers can choose from a variety of local stores including Safeway, Trader Joe’s, Whole Foods and Costco, and can mix items from multiple stores into one order. Instacart is disrupting the traditional grocery delivery business with its approach, which utilizes a crowdsourced model for Personal Shoppers and needs no warehouses or trucks. Learn more at www.Instacart.com.