Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bloomberg.com

Post reply on HN
Print view View original

31–40 of 83 posts

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

#31

Post by siliconc0w »

My theory is that the inability of US chains to figure out online ordering is really some anti-competitive agreement to force customers to go into the store because the chains live and die by high-margin impulse buys.

Wholefoods just opened a brand new chain called '365' that has all sorts of sophisticated nonsense like a programmatic tea-bot and yet there is no online ordering. Even the made to order stuff is driven by an interface which could just be made publicly accessible and they'd be done but no, into the store you go.

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

#32

Post by laser »

biggc wrote: post #27

I feel like I'm taking crazy pills. Every supermarket in Montrela offers phone orders and home delivery for a fee of less than $5 if your order is big enough ($50+). If you want to, you can even do your shopping in the store, and pay about two bucks to have them deliver to your house if it was in a few km. I just checked, and one of the smaller chains (4 stores) has their own online ordering platform.

Their revenue numbers must look absolutely insane, even if they're not actually profitable. I spend more money through instacart right now than any other software, and maybe all other software I use, combined.

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

#33

Post by arikr »

laser wrote: post #32
biggc wrote: post #27

I feel like I'm taking crazy pills. Every supermarket in Montrela offers phone orders and home delivery for a fee of less than $5 if your order is big enough ($50+). If you want to, you can even do your shopping in the store, and pay about two bucks to have them deliver to your house if it was in a few km. I just checked, and one of the smaller chains (4 stores) has their own online ordering platform.

Their revenue numbers must look absolutely insane, even if they're not actually profitable. I spend more money through instacart right now than any other software, and maybe all other software I use, combined.

Not appropriate to count entire cart/shopping spend as Instacart's revenue. Think of that as "GMV". Instacart's revenue is their delivery charges, service charges, and any money the stores pay them / % fees.

See #6 here http://a16z.com/2015/08/21/16-metrics/

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

#34

Post by Eridrus »

siliconc0w wrote: post #31

My theory is that the inability of US chains to figure out online ordering is really some anti-competitive agreement to force customers to go into the store because the chains live and die by high-margin impulse buys. Wholefoods just opened a brand new chain called '365' that has all sorts of sophisticated nonsense like a programmatic tea-bot and yet there is no online ordering. Even the made to order stuff is driven…

I don't think so.

Supermarkets and e-commerce are entirely different competencies and I have no trouble believing that being good at one doesn't give you a tonne of advantage at the other.

Putting some startup's tea-bot into a store is far easier than integrating that tea-bot into an online ordering system.

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

#35

Post by envy2 »

oculusthrift wrote: post #14
gkoberger wrote: post #9

Earlier quoted context omitted.

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…

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

At least in DC, the Amazon Fresh (and Prime Now) drivers are definitely just random people in their own car, the same as Instacart.

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

#36

Post by cududa »

siliconc0w wrote: post #31

My theory is that the inability of US chains to figure out online ordering is really some anti-competitive agreement to force customers to go into the store because the chains live and die by high-margin impulse buys. Wholefoods just opened a brand new chain called '365' that has all sorts of sophisticated nonsense like a programmatic tea-bot and yet there is no online ordering. Even the made to order stuff is driven…

I think you're severely overestimating the ability of supermarket chains.

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

#37

Post by caminante »

siliconc0w wrote: post #31

My theory is that the inability of US chains to figure out online ordering is really some anti-competitive agreement to force customers to go into the store because the chains live and die by high-margin impulse buys. Wholefoods just opened a brand new chain called '365' that has all sorts of sophisticated nonsense like a programmatic tea-bot and yet there is no online ordering. Even the made to order stuff is driven…

365's a downmarket brand (lower margin) focused on millenials and a "hip" shopping experience.

WFM never wants to be a virtual distribution center for Instacart.

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

#38

Post by a13n »

lstyls wrote: post #20
a13n wrote: 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 tha…

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

Seems inevitable. :/

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

#39

Post by e1g »

caminante wrote: post #37
siliconc0w wrote: post #31

My theory is that the inability of US chains to figure out online ordering is really some anti-competitive agreement to force customers to go into the store because the chains live and die by high-margin impulse buys. Wholefoods just opened a brand new chain called '365' that has all sorts of sophisticated nonsense like a programmatic tea-bot and yet there is no online ordering. Even the made to order stuff is driven…

365's a downmarket brand (lower margin) focused on millenials and a "hip" shopping experience. WFM never wants to be a virtual distribution center for Instacart.

FWIW WholeFoods recently invested significant sums (~$30M) into instacart and made them the official online distribution channel. So WFM sees some value in being a distribution center, if that means moving more of their goods.
Post reply on HN