Grocery food delivery service Instacart, which is facing intense competition from Amazon now that the eCommerce giant owns Whole Foods Market, has raised $200 million in a fresh round of funding.
In a company blog post, Instacart said it closed on a $200 million Series E round of financing led by Coatue Management. With the round, Instacart reported it is now valued at approximately $4.2 billion. Glade Brook Capital Partners took part in the round of funding as a new investor, according to Instacart’s founder and CEO, Apoorva Mehta.
“Recognizing that our shoppers need better tools and processes to be able to offer great customer service, we will be investing in building robust shopper support teams and software,” said Mehta. “And, of course, we will continue to grow sales for our retailers and [consumer packaged goods (CPG)] partners by strengthening our partnerships and innovating together.”
Instacart had a strong 2017, with its Express subscriber base increased by 300 percent and growth coming from around the country — and not just in big cities. It launched in more than 160 new metropolitan areas in 2017, and is now available in 70 million households in the U.S. and Canada combined.
“In 2017, the online grocery market reached a tipping point,” Mehta wrote. “Offering customers the ability to buy their groceries online went from being a nice-to-have to being mission critical for grocery retailers. As a result, seven of [the] top eight North American grocers jumped on to the Instacart marketplace. This brings us to nearly 200 grocery partners. Simply put, North America’s favorite grocery stores are now delivering via Instacart.”
The upbeat news out of the grocery delivery firm comes at a time when it is facing more competition with Amazon going after the same food delivery market. Amazon just announced it will deliver Whole Foods groceries via its Prime Now service in select U.S. cities, and noted the program will expand nationwide this year.