Instacart raised $350 million in a Series E financing round led by Coatue Management, putting the grocery delivery company’s valuation at $4.35 billion. The round includes $200 million in funding that Instacart previously announced in a February blog post. The company has raised more than $1 billion since its founding in 2012.
Instacart will use the capital to double the size of its team, further expand its footprint across North America and invest in new products and services. The company has partnered with major grocery retailers including Kroger, Albertsons, Publix, Costco, Ahold Delhaize, HEB, Loblaw and Sam’s Club, and recently added BJ’s Wholesale Club and Fresh Thyme Farmers Market as well.
“The online grocery market hit a tipping point last year, as more and more consumers demanded grocery delivery,” said Ravi Gupta, COO and CFO of Instacart in a statement. “We are excited to accelerate our plans to bring online grocery everywhere and to keep transforming the way people shop.”
Investments in Instacart are coming at a time when grocery e-Commerce is seeing rapid growth. Online grocery sales were valued at $20.5 billion in 2016, accounting for 4.29% of the industry’s retail sales, according to Nielsen and the Food Marketing Institute. The funding also comes two months after Amazon unveiled free two-hour delivery of natural and organic products from Whole Foods via Prime Now.
As online grocery continues to grow, these merchants will have to analyze which product categories they push online and which drives drive in-store purchases, according to SKUlocal. Approximately 52% of digital grocery shoppers believe they generally find better product prices online for groceries, over-the-counter items, health/beauty and pet supplies, while only 28% believe they will find better prices in-store.