Before the coronavirus pandemic, I only used Instacart when I was sick, to order Ny-Quil, Benadryl, ginger, Kleenex, crackers and other things I want when I have a fever. Since the coronavirus hit the United States, I have only used Instacart for shopping. I haven’t been to a non-Trader Joe’s store for over three months thanks to Instacart. It seems that I am far from the only one who likes someone else to brave the supermarket full of germs for me. The founder of Instacart, 33, Apoorva Mehta, is now a billionaire, thanks to the sharp increase in demand for Instacart services, as well as a new round of financing on June 11 of $ 225 million. This round of financing pushes the valuation of Instacart to 13.7 billion dollars (it was 7.9 billion dollars previously). With a 10% stake in Mehta in the company, he now has a net worth of $ 1.2 billion.
Instacart, for those who live under a rock or who bravely go to the supermarket alone, is a on-demand delivery company that can buy from local grocery stores, pharmacies, Costco and even Target for you. Since the coronavirus shutdown, the demand for Instacart services has increased. The service is currently available for 85% of households in the United States and 70% of Canadian households. With home orders for the pandemic in place, Instacart’s order volume has increased by 500% in the past year. In addition, customers spent, on average, 35% more per order than usual.
Instacart has also become a bright spot for job seekers in the pandemic. The company has hired 300,000 new buyers since March and in April announced plans to hire another 250,000. These new hires will allow the overloaded service to resume deliveries of one hour and the same day.
Mehta was born in India and raised in Canada. He developed a curiosity for how things worked at a young age. He wasn’t sure what he wanted to do after college, so he signed up for an engineering course at the University of Waterloo. After college, he worked for a number of technology companies, including BlackBerry and Qualcomm, before moving to Seattle to work as a supply chain engineer at Amazon. He was responsible for developing order processing systems to deliver packages from Amazon warehouses to customers’ doors. During his years in the Amazon, he learned that he loved creating software and wanted to be challenged. He was not challenged on Amazon, so he resigned.
He spent the next two years founding startups. Mehta estimates that he started 20 companies before Instacart. He built an advertising network for social gaming companies and spent a year developing a social network for lawyers. He liked to put himself in the position where he had to learn about an industry and solve problems for it. All of these businesses have failed. He realized that the common theme was not that his product didn’t work, but that he didn’t care about the product. He was not a player. He didn’t care about lawyers. Mehta turned his attention to the problems he encountered in his daily life. He lived in San Francisco and did not have a car. He liked to cook but couldn’t get the groceries he wanted near his home. It was in 2012 and people were literally doing everything online – meeting, shopping, watching movies, but not grocery shopping. He felt like he had found an idea and less than a month later, he had coded a rudimentary version of an application for those who wanted to do grocery shopping and another for those who did their shopping for the customer. .
Of course, the idea of ordering groceries online and having them delivered was not new. Home Grocer and Webvan tried to do it during the first dot-com boom and imploded during the bust. Mehta was not worried. He felt that the timing was not right for the early 2000s pioneers of grocery delivery. (For what it’s worth, I used Home Grocer and Webvan in 1999-2000.) After all, today everyone not only has a smartphone, but people are also much, much, much more comfortable using apps for transactions in 2020 than they were in 2020. 1999. At the time, we didn’t even know what an application was. (Home Grocer had a website, FWIW) Mehta has partnered with Whole Foods, Target, Safeway, Albertsons, Kroger, CVS and Costco. He was the first customer and buyer of Instacart – completing both sides of the transaction to test both sides of its application.
Mehta then used her app to send a six-beer pack to a Y Combinator partner in 2012, which earned her a meeting and an investment in her young business. A year later, Mehta landed on a list of 30s under 30 – despite the fact that orders at that time often arrived with no buyers available. Mehta made the deliveries himself by calling an Uber.
Since 2012, Instacart has grown from San Francisco to more than 5,500 cities in North America. The company has contracts with 30,000 stores and in 2019 added pickup services. In April 2020, Instacart also added prescription delivery services. Currently, it is available in nearly 200 Costco pharmacies.
To date, Instacart has raised approximately $ 2.2 billion in funding from a who’s who of Silicon Valley venture capitalists. If the coronavirus caused you to be put on leave or laid off, check out Instacart – many people are doing exceptionally well at helping the customer service workers who are helping us so much right now.