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Popular grocery delivery outlet Instacart has announced new funding of $200 million from the duo of its existing investors Valiant Peregrine Fund and D1 Capital Partners.
Per the announcement, the Instacart new funding round has shut up the company’s valuation to $17.7 billion.
With the outbreak of the coronavirus and the ensuing lockdowns, business survivals entail the embrace of the digital channels to keep up with demands. This extra need from businesses has called for increased funding from company’s who are looking to solidify the digital operations. The new funding round will place Instacart amongst delivery firms whose offerings will be enhanced post-COVID-19 in which shopping and delivery will follow the new normal.
“We expect to deploy the new capital in a number of ways, including product development focused on introducing new features and tools to enhance the customer experience, continued investment in Instacart Enterprise to support retailers’ end-to-end ecommerce needs, and further investment in Instacart Ads to help connect Consumer Packaged Goods (CPG) brands of all sizes to customers shopping online from their favorite local retailers,” Instacart said in a statement.
With Instacart’s current partnership amounting to 500 retailers and delivery networks spanning nearly 40,000 store locations across the U.S. and Canada, the company is set to establish itself as the leader in delivery across the North American continent through more strategic partnerships.
Instacart New Funding Becomes More Frequent
Instacart is a company with strong fundamentals whose offerings became more vital to people’s survival during the COVID-19 induced lockdowns.
Before this new Instacart funding round, the company has raised a $225 million financing round led by DST Global and General Catalyst back in June and another $100 million back in July. While the June funding round gave the company a $13.7 billion valuation, the July round shot up the valuation to $13.8 billion.
Commenting on the latest funding round, Instacart CEO Apoorva Mehta said:
“Today’s investment is a testament to the strong conviction our existing investors have in the strength of our teams and the important role Instacart plays for customers, partners, and the entire grocery ecosystem. I’m incredibly proud of our team’s work to scale our business this past year and rise to meet the unprecedented consumer demand and growth.”
As TechCrunch reported, the company’s meteoric rise is faced with two challenges including the regulatory war in California which seeks to classify rideshare drivers and delivery workers as independent contractors, a bill Instacart is in favor of. In addition, the company has an unsettled lawsuit from Washington, D.C. District Attorney General Karl A. Racine that alleges the company charged customers millions of dollars in “deceptive service fees” and failed to pay hundreds of thousands of dollars’ worth of sales tax. The lawsuit seeks restitution for customers as well as payment of back taxes and the entire interest accrued.