Instacart was founded by Apoorva Mehta, a former Amazon software engineer who took the expertise he learned working for Amazon to build a company to compete against it. Mehta has said that the company plans to expand to 10 cities by 2014, fueled by an $8.5 million Series A round led by Sequoia Capital earlier this year.
While Chicago is pretty far away from San Francisco, Mehta thinks it’s a good first move outside the Bay Area for Instacart.
“We look for urban areas with tech-savvy consumers who may not have cars and value convenience,” he said in a press release. ”Chicago fit the bill. We’re really excited to expand our footprint beyond San Francisco. There’s a lot more to come.”
Right now, Amazon and Instacart seem happy to avoid direct competition with one another. Amazon’s first expansion of its grocery service put it in Los Angeles, a few hundred miles from Instacart’s home base in San Francisco. While neither company is talking about their roadmap for expansion, it seems that the two are perfectly happy to build businesses away from one another before trying to take one another on head-to-head.
While Instacart did dodge direct competition with Amazon, Chicago is home turf for Peapod, another grocery delivery service with a strong presence on the east coast and parts of the midwest. That said, Mehta is confident in the strength of his product, noting in an email that one-hour and same-day delivery, as well as the ability to get groceries from a number of popular stores sets Instacart apart from its competition.
“This is not the first time this has happened – Safeway.com exists in (San Francisco) – but 40% of orders on Instacart still come from Safeway. We have more Safeway deliveries than Safeway has in our area,” he said in an email.
Previously on GeekWire: Instacart adds $99 ‘express’ membership, fires another shot at Amazon Fresh