Following Amazon's deal to acquire Whole Foods, five big grocery chains made their own deals to partner up with the grocery delivery startup Instacart.
Kroger, Publix, Ahold, H-E-B, Albertsons, and Costco, all use Instacart to offer their customers convenient at home delivery.
Even Whole Foods formerly used the service prior to being acquired from Amazon’s acquisition.
Evidently, the grocery delivery company is attracting investors and has announced that it has raised another $200 million in a funding round.
“The funding values Instacart at $4.2 billion, said people familiar with the matter, who asked not to be identified because the terms are private. That’s quite a ways off from Amazon’s $649 billion market value, but Instacart said it can compete by forming more alliances with grocery stores concerned about the online shopping company’s dominance,” writes “Bloomberg.”
The company has raised $900 million from investors.
Amazon is testing a two-hour delivery program at Whole Foods in four cities so far.
But Instacart isn’t threatened, instead the company is uppin’ the ante and has an aggressive growth plan to offer its service in 190 markets in both the U.S. and Canada.
The five-year-old startup is also going to hire 200 new employees this year.
“We raised it because we want to win,” said Apoorva Mehta to “Bloomberg.”
Amazon is still very much a threat to Instacart. But Instacart is much more attractive to staff in the logistics business. The start-up invests significantly in its employees and has developed a team of expert grocery shoppers.
“If, in fact, Instacart can do that, I think they stay very competitive,” said Phil Lempert, the Supermarket Guru. “If they can’t do that, I think they’re in trouble,” referring to Amazon.
Although Amazon has significantly decreased the price of goods at Whole Foods, the grocery is still an upscale chain, meaning the average grocery receipt is higher than other stores. Trader Joe’s prices, for example, are 20 percent cheaper than Whole Foods.
Not to mention, Whole Foods appeals to a smaller demographic than those shopping at traditional grocery stores. So there is a lot of potential for growth for Instacart.
Read more about Instacart’s latest investment at “Bloomberg.”