some companies caught Same tailwind for COVID as U.S. supermarket delivery giant Instacart.
Reports show that by 2020, Instacart’s revenue has nearly tripled to around $1.5 billion. This incredible growth rate helped the company win a series of large and costly funding rounds. In June 2020, Instacart raised $225 million at a $13.7 billion valuation. A month later, the company added another $100 million to that round.
Instagram wasn’t ready yet. In October 2020, the company raised another $200 million, bringing its valuation to $17.7 billion. Then, in March 2021, the company added an additional $265 million in private equity at a $38.7 billion valuation. That’s a lot of money and a lot of paper value in a very short amount of time.
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Then the company got a little more complicated. The most recent reports on this show that Instacart grew by about 10% last year, although the third quarter saw a sharp 20% year-on-year growth. Around the same time, this column asked if competitors were undermining the company’s growth rate. (We can estimate the company’s revenue last year to be at least $1.65 billion, if you figure it out.)
Competition in the supermarket sector is fierce, with Uber and DoorDash trying to win promotions and provide fast delivery services within hours. However, Instacart plans to get growth back on track, potentially boosting the combined gross and generating a stream of recurring business revenue different from most established businesses.
Yes, the company is starting to sell software.
instacart platform game
The delivery unicorn, dubbed Instacart, this week announced a host of services it plans to sell to other companies on a modular or bulk basis.
Services offered include e-commerce support (digital tools to help grocers set up and manage online stores), order fulfillment assistance (Instacart delivery staff), and beginner assistance to enable customers to deliver super-fast deliveries. Small warehouse), advertising technology (instacart provides advertising). Digital retail participation technology), analytics and some in-store technical support.
It’s a long list, but it’s mostly software services. And we know what that means: higher gross margins, regular revenue from key customers. I would also risk a steady income, less cyclical income than grocery delivery in general.