Instacart today officially announced that it has closed a $220 million Series C round, pushing total funding past $275 million for the fast-growing San Francisco-based startup.
Re/code originally reported the financing round, which was led by Kleiner Perkins Caufield & Byers (KPCB) late last month. Other investors in the Series C round include Comcast Ventures, Dragoneer Investment Group, Thrive Capital, Valiant Capital and previous investors Andreessen Horowitz, Khosla Ventures and Sequoia.
The company will use the fresh funds to add more cities, expand its product offerings, and improve its service.
“Instacart’s offering really resonates with customers,” CEO Apoorva Mehta said in a statement. “We’ve got robust processes in place to support category and geographic expansion. Our vision is to help all types of local retailers get online and offer their customers one-hour delivery. This financing round will help us accelerate and scale those efforts.”
Instacart, which lets customers buy groceries online and have them delivered within one hour, had previously raised $44 million in June. At the time, it offered service in 10 cities, and has added five more metros since then. The company said its revenue grew by 10X last year and doubled from Q3 to Q4.
Instacart charges $3.99 for two-hour delivery, and $5.99 for one-hour delivery when orders of $35 or more are placed. Unlike Amazon Fresh, which operates its own grocery distribution facilities, Instacart employs more than 4,000 personal shoppers who hand-pick grocery items at established stores such as Whole Foods, Costco and Kroger.
Mehta recently said that he planned to expand Instacart’s inventory beyond groceries, signaling perhaps even deeper competition with Amazon. He told Re/code that the company may partner with third-party delivery companies, and is thinking about expanding into rural areas or international cities.
Instacart faces competition from giants like Amazon and Google, as well as smaller startups like Postmates, WunWun, and FreshDirect. In a recent grocery delivery experiment, GeekWire’s Todd Bishop found although his personal shopper was “top-notch,” Instacart ended up charging significantly more for items compared to Safeway and Amazon. The company then explained that it’s “actively working” on eliminating the difference between in-store and online pricing.
Instacart, which employs more than 100 full-timers — not including the personal shoppers — is expected to hit $100 million in revenue this year.
