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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

#41

Post by gtirloni »

I see Uber, Lyft, Amazon Fresh, Instacart, etc and I can't understand why they take the market by storm like that. They are not the first to ever think about that, their service isn't super great (except for Amazon, I'd say) and still, in the US, it seems like the market just sits and waits for them. Then a majority of people jumps in and the thing skyrockets.

Meanwhile, in other countries, small to medium-sized companies have had online groceries ordering for many years, local taxi unions have had websites and recently apps, and still... it's like OMG so much innovation from US companies let's give them crazy valuations.

What gives? Is it market size?

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

#42

Post by paulcole »

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.

Are they counting pass-through as revenue?

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

#43

Post by jdminhbg »

gtirloni wrote: post #41

I see Uber, Lyft, Amazon Fresh, Instacart, etc and I can't understand why they take the market by storm like that. They are not the first to ever think about that, their service isn't super great (except for Amazon, I'd say) and still, in the US, it seems like the market just sits and waits for them. Then a majority of people jumps in and the thing skyrockets. Meanwhile, in other countries, small to medium-sized comp…

I'm not on the Amazon Fresh/Instacart trend yet (and may not be -- I really enjoy grocery shopping and frequent different farmers' markets, so it's not a problem I need to have solved for me).

But as for Uber/Lyft, the reason they're vastly more valuable than whatever local taxi website/app is convenience and lack of friction. When you get an Uber, you don't have to worry about payment or directions; it's all handled for you. When you get to a different city, you don't have to google the local taxi companies and pick one; you just open Lyft and get a ride.

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

#44

Post by pj_mukh »

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.

All my nearby stores offer this, I still use Instacart. It lets me shop from any store, their QC is amazing, and living in a small apartment I need to make 2 or 3 $35 trips (instead of one big $150 trip) and that becomes free on Instacart (saving me close to 5hrs per week of drudgery).

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

#45

Post by twakefield »

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 know nothing about grocery retail but my initial reaction is why can't Instacart tie into Safeway, Wholefoods, etc. inventory management system to get a more timely view on what's available? Are existing grocery inventory management systems more rudimentary so this is not possible?

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

#47

Post by caminante »

e1g wrote: post #39
caminante wrote: post #37

Earlier quoted context omitted.

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.

Yes. WFM has an equity stake in Instacart and has benefited (income diversification + investment appreciation).

That said, from what I'd read (and it's been a while), WFM's strategy with Instacart sounded like a way to steal market share and convert customers to shop IN their stores. If I recall, Instacart pickers were getting bonuses for (choosing) WFM stores, and WFM was offering food to pickers with no markup.

I don't know if it'll work out. WFM's been under fire for it's pricing for a while. Maybe Instacart will drive incremental sales growth (as you're alluding to). I'm skeptical as it might cannibalize the value of their high-cost experience locations.

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

#48

Post by brokenmasonjars »

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.

None of my grocery stores within the 60 minute range offer delivery. I wish they did. I live outside of a major city, in a pretty wealthy area. There is no instacart, no amazon fresh, etc. Uber doesn't even deliver here. It's pretty lame and the population exists to support even just one of these services.

Aggravates me a lot..which is an understatement.

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

#49

Post by omarchowdhury »

whiskyant wrote: post #40
greglindahl wrote: post #28

As a comparison, the Whole Foods supermarket chain has a market cap of $9.6G. Yow.

Yep, and Safeway with over 1500 stores across the US/Mexico has a market cap $8.1B.

Instacart is building datasets right now on what people purchase. They can simply bypass their physical market place partners of today and become a retailer without the cost of running physical stores. They would only need to take care of fulfillment, and hey, maybe with machine vision there will be a little Instacart robot that delivers your groceries to you direct from the Instacart warehouse: cutting yet another cost and justifying their high valuation. Who know's if that's what they're up to.

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

#50

Post by hkmurakami »

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…

What about kickbacks for preferential shelf placement?
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