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Instacart in Talks to Raise $400M at $3B Valuation

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Re: Instacart in Talks to Raise $400M at $3B Valuation

#11
Some context, aside from the viability of Instacart itself.

Apoorva Mehta used to work down the hall from us at SomaCentral, a shared office space retrofitted out of an old law firm on Townsend. He and his buddy would be heads down in their laptops every time we walk past their bullpen corner.

They were busy building out a legal tool slash social network slash law something slash annotation something slash whatever. The plan didn't so much change but rather morph every time I said hi.

They were smart though, so I figured they would hit it whenever they get to it. Though they've been at this for awhile now.

While most others tried to keep a social factor going on at the space, they tend to be so busy they would avoid it. Though and now then I do remember getting to grab a drink with them.

A few years later, settling in my new job in Berkeley/Oakland I called up Instacart to deliver me some groceries. But it was only last year I finally looked up the company profile and soon realized it's the same Apoorva Mehta.

From being that dude to 3 billion dollars in a matter of five years is--to quote another commenter--insane.

But he's keeping the silicon valley dream alive.

That's pretty nifty in itself.

The rest of us are just hanging out here writing comments.

Re: Instacart in Talks to Raise $400M at $3B Valuation

#14
post #5

That is insane and unreasonable. The bubble has lost it.

Why? Grocery shopping is extremely inefficient and has to be done weekly by almost everyone in the world. It's not a small problem that they're solving, so large amounts of cash (and a high valuation) makes sense.

One doesn't deserve a high valuation just because the problem they are solving is hard.

The company he came from, Amazon, has more cash than anyone could raise. They have logistical expertise and are perfecting same day shipping at a national scale.

They also offer Amazon "Fresh" which is essentially the same service except they don't skirt labor laws by classifying their employees as contractors.

And non-tech people actually trust Amazon and order quite a bit from them.

For them to succeed outside of a few big cities would require gross negligence and incompetence by Amazon, which isn't impossible. But seems unlikely.

Re: Instacart in Talks to Raise $400M at $3B Valuation

#16
post #12

I was going to post a comment about Instacart here, but instead decided to write a little thing on Medium. Why Instacart is gonna get crushed by Amazon https://medium.com/@a13n/why-instacart-is-gonna-get-crushed-...

tl;dr is that Amazon can deliver a better experience because they actually know exactly what they have in their own warehouses. Often times on Instacart you order something and it gets replaced with something else because it was out of stock, because they work with other stores like Safeway, Whole Foods.

Also everyone already has a relationship with Amazon so it's just easier to go that route.

Re: Instacart in Talks to Raise $400M at $3B Valuation

#17
post #5

That is insane and unreasonable. The bubble has lost it.

Why? Grocery shopping is extremely inefficient and has to be done weekly by almost everyone in the world. It's not a small problem that they're solving, so large amounts of cash (and a high valuation) makes sense.

Because it's a terrible way to solve it and this company doesn't seem to be executing particularly well on it.

I actually agree that online grocery shopping should be great. It's mystifying to me that it isn't: if you go to the UK, the experience is fantastic: order direct from the grocery store, easy to order, cheap and efficient delivery.

I don't really understand why US chains can't do the same thing.

Re: Instacart in Talks to Raise $400M at $3B Valuation

#19
post #12

I was going to post a comment about Instacart here, but instead decided to write a little thing on Medium. Why Instacart is gonna get crushed by Amazon https://medium.com/@a13n/why-instacart-is-gonna-get-crushed-...

Integrating inventory across various grocery stores would be ideal, but it seems like a big undertaking not to mention it clashes with the shopping experience (e.g. customers keep items in their shopping carts for long times)

I like the idea of warehouses, though the requirement to stock items seems restrictive, kinda like when Google Shopping Express launched - it had such a small selection of products. One potential middle ground... why not use a warehouse/centralized location to aggregate the requested groceries, then have a separate system to dispatch the groceries to the customer? By aggregating from multiple grocery stores, you minimize the risk an item is not available.

Re: Instacart in Talks to Raise $400M at $3B Valuation

#20
post #12

I was going to post a comment about Instacart here, but instead decided to write a little thing on Medium. Why Instacart is gonna get crushed by Amazon https://medium.com/@a13n/why-instacart-is-gonna-get-crushed-...

I think you nailed it. I live in NYC and work too much, meaning I live and die by trading money for time. And every time I use instacart I regret it for the exact same reasons you describe.

The idea of hooking into some kind of warehouse management network makes a lot of sense. Does an API exist? Probably not. But there's an opportunity right there. Partner with a major warehouse management system, preferably one that works with Safeway or Stop n' Shop, and figure out a way to cut out the store visits altogether.

Of course this would mean automating away the shoppers :/.

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