Instacart Inc.’s valuation hit $13.7 billion in a funding round after the popularity of the grocery delivery service exploded in recent months from an influx of people staying at home under pandemic lockdowns.
The new value matches the price Amazon.com Inc. paid to acquire Whole Foods in 2017 and is a significant jump from Instacart’s valuation in late 2018, which was $7.9 billion.
Instacart raised $225 million in the funding round. It will use the infusion to support the surge of new customers, workers and partners and fuel behind-the-scenes work in advertising and business software it provides to grocery partners, Instacart said Thursday. DST Global and General Catalyst joined existing investor D1 Capital Partners in the round.
The grocery delivery service, which is available to more than 85% of U.S. households and 70% in Canada, told Bloomberg last month it’s on track to process more than $35 billion in sales this year. Since the lockdowns began in the U.S. in March, demand for Instacart has risen to a level investors didn’t expect to see before 2025.
“We’re proud to have Instacart continue to play an important role in people’s lives now and long after this crisis subsides,” Chief Executive Officer Apoorva Mehta said in a statement.
Founded in 2012, Instacart has raised more than $2 billion of capital in total. The company’s success hasn’t always been smooth. Workers have staged at least two walkouts since the pandemic began to protest allegations of unsafe working conditions and low pay. Like other gig companies, Instacart categorizes many of its workers as independent contractors rather than employees -- a designation California lawmakers sought change with a law that went into effect this year.
San Francisco-based Instacart is among companies supporting an initiative on the November ballot to reverse the state law. The outcome of that vote is critical to Instacart as it seeks to increase its workforce from 180,000 shoppers a few months ago to 750,000.