Instacart Doubles Valuation With $265 Million Funding Round

Instacart closed a $265 million funding round that sent the grocery delivery app’s value to $39 billion, the company announced today.

The new valuation adds more than $1 billion to the fortune of 34-year-old founder Apoorva Mehta, who Forbes calculates has a net worth of $3.5 billion. Mehta became a billionaire last year after the company raised $225 million in June. Four months later he closed a $200 million Series H round that more than doubled Instacart’s valuation to $17.7 billion. It was valued at $7.9 billion in early 2020.

Business has been booming for Instacart as consumer demand for delivery and pickup services continues to grow amid the pandemic: Online grocery purchases have jumped to 10% of the $1 trillion industry during the pandemic, more than triple what they were at the end of 2019. That surge created tumult at Instacart including public feuds with contract employees over Covid-19 safety protocols and hazard pay, as well as operational chaos that threatened to overwhelm its operations in the early days of the pandemic.

“We saw five years of growth in a matter of five weeks,” Mehta, a former supply-chain engineer for Amazon

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and member of the 2015 30 Under 30 class, told Forbes in January. “And the growth has continued. We grew over 300% year-on-year.”

The new funding round was led by existing investors, including Andreessen Horowitz, Sequoia Capital, D1 Capital Partners, Fidelity Management & Research Company, and T. Rowe Price Associates. The new funding will be spent on advertising and to connect customers with retailers, as well as increase corporate headcount by 50% in 2021.

Instacart works with more than 600 retailers across 45,000 stores in the U.S. and Canada. Since the start of 2020, Instacart added 25% of those stores and retailers, including new ones like Sephora and 7-Eleven while also expanding with others like Walmart

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. Its initial public offering is highly anticipated and, if it happens, could send the valuation even higher: DoorDash, a restaurant delivery company that is expanding into groceries, went public in December at an initial price of $102 and rose 80% on the first day of trading. Shares closed Monday at $169, giving the company a market capitalization of $54 billion.

“I’m playing a 20-year game,” Mehta told Forbes when asked about Instacart’s IPO. “Grocery is the largest retail category in the world, and yet it’s still not digitized. We’re excited by what the future looks like.”