Instacart is a company that offers grocery delivery services from multiple local stores within an hour. Instacart has raised $8.5 million in Series A funding led by Sequoia Capital. Other investors that participated in this round include Khosla Ventures, Canaan Partners, SV Angel, and Paul Buchheit (Gmail creator). Sequoia Capital chairman Michael Moritz has joined Instacart’s board of directors.
“Having been involved in Webvan, Sequoia is painfully familiar with what it takes to be successful in the grocery delivery business,” stated Moritz. “Until we encountered Instacart, we had still been receiving outpatient therapy for our Webvan fiasco but the doctors say — and we agree — that because of advances in technology and a most imaginative approach, there is little danger of a relapse. Apoorva and his team are the first to have cracked the code on how to make same-day delivery great for customers and all other stakeholders.”
Instacart will use the funding to expand beyond San Francisco. They want to be available in 10 major cities in the U.S. by 2014. Instacart uses a crowd-sourced labor force called “Personal Shoppers.” The Personal Shoppers shop for and deliver grocery orders while using their own vehicles in under an hour. This eliminates the need to have expensive infrastructure like warehouses, trucks, and full-time drivers. Instacart monitors the price, location, and availability of thousands of individual grocery items in local stores.
“We’re really excited to be working with the Sequoia team, who bring extremely valuable and relevant experience to the table,” said Apoorva Mehta, CEO and founder of Instacart. “Now that we have our San Francisco operation up and running and we have a great formula for success, it’s time to turn our attention to national expansion.”
Instacart plans on expanding into dense urban cities like Chicago, New York City, and Boston where convenience is still valued, but many of the residents do not have cars. Many people in those big cities strongly believe in crowdsourcing models. Consumers can sign up for free Instacart accounts at Instacart.com. Other cities that Instacart is available in include San Francisco, Oakland, Berkeley, Mountain View, Palo Alto, Menlo Park, and Sunnyvale, Calif.
This past month, Instacart launched a new service called Instacart Plus. The Plus service offers customers the lowest priced items for national-brand grocery items.