Instacart, GrubMarket Raise Funds During Pandemic-Driven Grocery Delivery Boom


Before the pandemic hit the United States, Walmart (NYSE:WMT) Grocery led the grocery delivery industry, consistently staying about a 50% market share of sales, according to Second Measure data. In March, Walmart dropped to a 25% share as it struggled to keep up with the surge of demand. Instacart (ICART) rose up the ranks, hitting a high of 57% in April before settling down into a 48% share in June.

The market gains required Instacart to quickly expand its workforce and customer experience, which costs money. Last week, Instacart received a fresh $200M infusion at a $17.7B post-money valuation. D1 Capital and Valiant Peregrine Fund led the round, which follows a $225M round in June and $100M round in July. Instacart says it now has 500 retail partners and delivers from nearly 40,000 store locations across the United States and Canada.

“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 (NYSE:CPG) brands of all sizes to customers shopping online from their favorite local retailers,” said Instacart in the announcement blog.

Kroger (NYSE:KR) and Blue Apron (NYSE:APRN) supplier and farm-to-table delivery service GrubMarket raised $60M in a Series D round that included funds managed by BlackRock, Reimagined Ventures, and Trinity Capital Investment. GrubMarket operates both a consumer-facing business and a B2B business, which supplies food supplies to grocery stores, food kit companies, and the like.

GrubMarket counts more than 500 grocers and 8,000 restaurants among its clients, which also includes Whole Foods, Safeway, and Hello Fresh. The businesses can either turn around and resell the GrubMarket products or package the ingredients into a new product.

The latest round valued GrubMarket at between $400M and $500M. The company is profitable and plans to go public at some point, though the timeline is uncertain due to the current macro uncertainties.

(Image credit: Instacart)

Other top VC deals of the week:

  • Dialpad: Google (GOOG,GOOGL) Ventures participated in the OMERS Growth Equity-led $100M round for Dialpad, AI-powered cloud business phone and contact center provider, at a valuation of over $1.2B. The startup says it has more than 70K customers, including Uber, Domo, and Motorola Solutions. Over the past 12 months, Dialpad has exceeded $100M in committed ARR.
  • “We have seen a huge increase in demand for cloud communications tools, and we are raising additional capital to meet this demand,” said Craig Walker, Dialpad CEO.
  • Cooler Screens: Verizon (NYSE:VZ) Ventures and Microsoft’s (NASDAQ:MSFT) M12 joined the $80M Series C for Cooler Screens, which replaces the glass doors in a store’s cooler section with interactive displays. Silicon Valley Bank also stepped in with some debt financing. The digital displays can provide customers with product information, like ingredients and calorie count, and serve as an advertising platform with built-in shopping data.
  • Cooler Screens are connected to Verizon’s wireless network and Microsoft provides the underlying software. The display tech is currently rolling out to all 2,500 Walgreens stores in the United States, and the company has partnerships with Kroger and GetGo.
  • Envisics: Strategic investors General Motors (NYSE:GM) Ventures, SAIC Motors, Hyundai Mobis, and Van Tuyl Companies backed the $50M Series B for Envisics, which creates an in-car holographic display. Envisics combines computer vision, machine learning, big data, and navigation tech for the displays, which show dashboard features like warnings and maps. Valuation now stands at over $250M. Envisics tech will start appearing in mass produced vehicles in 2023.

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