Solution-Max: Instacart now serves 70 percent of U.S. households

Thursday, August 30, 2018

Instacart now serves 70 percent of U.S. households

Toward the end of 2017, Instacart penned a partnership with one of the country’s biggest grocery retailers, Kroger. At the time, it was a smaller deal with one of Kroger’s chains called Ralphs.

But today Instacart is expanding its partnership with Kroger, bringing Instacart delivery to 75 additional Kroger markets, growing Instacart’s Kroger footprint by 50 percent nationwide. The expansion will be completed by late October, bringing Instacart delivery to more than 1,600 Kroger stores.

This builds on Instacart’s momentum, following partnership deals with chains like Albertsons, Aldi, Sam’s Club, and Loblaw.

In all, Instacart is now available to 70 percent of all households across the country. Last year, the company announced its goal to reach 80 percent of U.S. households by the end of 2018, and its most recent funding round seems to be propelling the startup to achieve that goal.

In February, Instacart raised $200 million led by Coatue Management, as well as Glade Brook Capital Partners and existing investors. The round valued Instacart at $4.2 billion.

Since Amazon’s acquisition of Whole Foods, Instacart has been put in a challenging position. But, in many ways, that challenge has represented opportunity. The nearly $14 billion acquisition has spurred an even more rapid evolution of the grocery industry, leaving incumbents with a choice: Acquire (or build) your own delivery platform or partner with Instacart to compete with online grocery purchase and delivery from Amazon.

Some retailers, like Target, have chosen to purchase their own platform. But other big players, such as Albertsons and Sam’s Club, seem to have been motivated by the Whole Foods deal to partner up with Instacart.

This has grown Instacart’s marketplace to feature more than 300 different retail partners on the platform, which has in turn helped grow Instacart’s community of shoppers, which has topped 50,000 this year.

As this growth continues, a great deal is dependent on Instacart’s ability to maintain the quality of the product. But the company is also taking steps toward shoring up the platform. Instacart has begun testing a partnership with Postmates to help make deliveries during peak hours in San Francisco.