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Instacart has raised another $200M at a $4.2B valuation

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Re: Instacart has raised another $200M at a $4.2B valuation

#91

Post by Pyxl101 »

octernion wrote: post #84
tfehring wrote: post #79

Earlier quoted context omitted.

Saying “we charge markups, but we won’t tell you what they are” is still not sufficiently transparent, in my opinion. Yes, Amazon and grocery stores do the same thing (at face value, anyway) by not disclosing their COGS. But the key difference is that my next-best alternative to Instacart is to just go to the grocery store myself. My next-best alternative to getting something delivered from Amazon isn’t to get it mor…

i am very confused why you have a higher bar for this than other services. would you actually create a spreadsheet that values your time (against other alternatives), gas/lyft/train fare to and back from the store, the extra costs associated with actually being in a retailer (and seeing the specials in store etc) and compare that against our offering? and again, we aren't the ones doing the markup -- those are coming…

Are you responding to the same screenshot that tfehring is commenting on? https://imgur.com/a/j47ls It says:

> "A mark-up is added to item prices at this retailer to cover the cost of the Instacart service. Prices are based on data collected in store and are subject to delays and errors."

There is no good, ethical reason why a delivery service should show me an item price that's different from what's in the store. It's completely ethical if the company wants to say, "The service fee for this store is X% (as a percent of item prices)", or "This store has an additional $X service fee". That is honest and reasonable. I expect a delivery service to quote me the same item price as the retailer quotes in its store.

The reason I have this preference is because of a delivery service's value proposition: shopping in my store, on my behalf. I have access to the same products and can buy them directly. So I want to directly consider the service's value proposition, by considering the service fee I'll need to pay versus buying things myself. (EDIT: Simplify)

Re: Instacart has raised another $200M at a $4.2B valuation

#92

Post by lazerpants »

roymurdock wrote: post #16
jedberg wrote: post #5

From an outsiders perspective this looks like a bad investment. But I'm an outsider, so I know I don't have all the information. I would love to get an insiders perspective on why this is a good investment. My two main concerns: 1) Amazon and Whole Foods: Are they not a concern? 2) Economic downturn: Will people still order groceries at a premium?

I assume instacart has a liquidity event (IPO) lined up for the near future (next 12 months), and a few late stage and previous investors are laying down a cash runway to get the company there. Notably this round ($200m) was less than their last round 1 year ago ($400m) so it seems growth has slowed and its time for an exit. So its not a bet, its a holdover cash infusion until the IPO, and is not exactly risky given…

It's really important to point out here that market downturn =/= recession. They often occur simultaneously but some market downturns are unrelated to recessions.

Re: Instacart has raised another $200M at a $4.2B valuation

#93

Post by traek »

jostmey wrote: post #88
clay_the_ripper wrote: post #14

I have never had a good experience with instacart. I’ve ordered from them probably 10-15 times and every single time, without fail, they either forget an item or replace an item with another item that I don’t want. This makes the service unusable, because if I’m cooking dinner that night and want to order instacart, there’s a high likelyhood I’ll be missing something crucial for my recepie, meaning I’ll have to go to…

I've had the exact opposite experience. Instacart worked really well for me, and Amazon Fresh was well, never that fresh. I suspect the quality of the service varies on geographic location

Amazon Fresh is a different service from Prime Now. Prime Now also delivers from local grocery stores (e.g. in LA, I can order groceries from Sprouts and Bristol Farms).

Re: Instacart has raised another $200M at a $4.2B valuation

#94

Post by octernion »

tomnipotent wrote: post #89
octernion wrote: post #84

Earlier quoted context omitted.

i am very confused why you have a higher bar for this than other services. would you actually create a spreadsheet that values your time (against other alternatives), gas/lyft/train fare to and back from the store, the extra costs associated with actually being in a retailer (and seeing the specials in store etc) and compare that against our offering? and again, we aren't the ones doing the markup -- those are coming…

>> and again, we aren't the ones doing the markup So you claim, but since you refuse to list what the IC markup is then it's impossible for us to tell. You're essentially using the retailer markup as an excuse to hide instances of when you do it yourself. Thus the lack of transparency. In any given transaction, I have NO idea what the actual % that was added by IC. I do not have this problem with Amazon Prime.

again, in 99.99% of the cases, we aren't doing the markup.

and, in the one case where we do not have a signed relationship with the retailer, we do explicitly note the percentage.

we aren't hiding anything. and, you have that precise problem with amazon prime -- what markup are they charging?

Re: Instacart has raised another $200M at a $4.2B valuation

#95

Post by roymurdock »

jjxw wrote: post #85
roymurdock wrote: post #41

Earlier quoted context omitted.

Fed doesn't have much room to play with interest rates currently, and won't until we see a meaningful pickup in productivity, or else they risk further depressing investment into productive assets and rerouting it into speculative assets (high interest rate = high cost of borrowing/lending = high friction = slows economy down). We would observe a productivity increase through wage growth, as would be expected in a hi…

Ah - that's an interesting perspective I had not considered. I was basing my prediction on the stronger than expected job gains, GDP growth forecasts, and how the Fed is cutting back on quantitative easing. Keeping an eye on the US inflation report coming out this Wednesday should provide more guidance on what the Fed may do - if it's higher than expected I think the Fed will probably raise rates by another .25%.

Yep, I think the more interesting question is: if labor market is so strong (low unemployment) then why aren't wages increasing meaningfully?

Here's one of my favorite practicing economists giving a bit more insight into the Fed and its interest rate strategy: https://www.newsmax.com/finance/narayanakocherlakota/fed-dri...

Re: Instacart has raised another $200M at a $4.2B valuation

#96

Post by octernion »

Pyxl101 wrote: post #91
octernion wrote: post #84

Earlier quoted context omitted.

i am very confused why you have a higher bar for this than other services. would you actually create a spreadsheet that values your time (against other alternatives), gas/lyft/train fare to and back from the store, the extra costs associated with actually being in a retailer (and seeing the specials in store etc) and compare that against our offering? and again, we aren't the ones doing the markup -- those are coming…

Are you responding to the same screenshot that tfehring is commenting on? https://imgur.com/a/j47ls It says: > "A mark-up is added to item prices at this retailer to cover the cost of the Instacart service. Prices are based on data collected in store and are subject to delays and errors." There is no good, ethical reason why a delivery service should show me an item price that's different from what's in the store. It…

as i have noted elsewhere in the thread, that is a message -- from the retailer -- that the prices are different from in-store (and again, online pricing is their prerogative).

instacart is not marking anything up.

edit: it seems clear that we can do better in terms of communicating this, so i've passed that feedback on to the team.

Re: Instacart has raised another $200M at a $4.2B valuation

#97

Post by octernion »

cmclaughlin wrote: post #77
octernion wrote: post #56

Earlier quoted context omitted.

as an engineer at instacart, it's very disheartening for me to see the top-rated comment on HN is "I can’t wait for instacart to go out of business." even if we did not provide value to you (which i apologize for -- it is a priority of ours to improve the replacement experience in particular as it is very frustrating to customers), i am not sure why that implies that we do not provide a valuable service for others an…

Overall I really like Instacart and quite frankly, I've come to depend on it. Shopping with kids is difficult... it's much easier to plan ahead and shop when I have a little free time. So congrats on the funding! I understand some of the frustrations about replacements. Originally the shoppers were pretty good about calling. Recently the app was updated for 1-1 chat and interactive replacement choices. However, it se…

thank you for the kind feedback -- we love to hear from customers who we help like this! and, we are constantly trying to improve the experience (especially the replacement experience!)

Re: Instacart has raised another $200M at a $4.2B valuation

#98

Post by lazerpants »

roymurdock wrote: post #65
gruez wrote: post #55

Earlier quoted context omitted.

>I have yet to see anyone put forth and truly plausible triggers for another large global recession - there are no debt and enforcement chains I can see that would drag the system under again that's not an indication of anything. has there been anyone who were able to predict the last few recessions with reasonable accuracy?

ok, and yes there were a few traders and economists who did ("the big short" follows 3 of these traders' stories), but in order to trade you need to have a thesis for what and when to buy. there are tons of gloom and doom traders and economists (usually trying to sell "safe" or alternative assets) but i have yet to read any clear, compelling cases laying out what and when to buy when the first domino falls that will…

The typical advice for the beginning of a market downturn is to buy bonds, which usually act as a safe haven from those fleeing stocks (perhaps untrue currently though). Alternatively, some propose purchasing blue chip dividend yielding stocks, as money moves from risky stocks to tried and true ones.

During a recession/large market correction, you're looking to hold all cash and just buy stocks cheap after they drop all the way to their lowest point (think Ford or AIG in 2008).

The problem with these strategies is that market events usually occur over sufficiently long time frames to obscure their size and direction. Looking back at 2007/2008, Lehman was the obvious "moment" but the market and economy didn't nose-dive instantly to their nadir on the collapse of Lehman Bros. It feels like there was a "moment", but it was only obvious in hindsight.

Re: Instacart has raised another $200M at a $4.2B valuation

#99

Post by tfehring »

octernion wrote: post #84
tfehring wrote: post #79

Earlier quoted context omitted.

Saying “we charge markups, but we won’t tell you what they are” is still not sufficiently transparent, in my opinion. Yes, Amazon and grocery stores do the same thing (at face value, anyway) by not disclosing their COGS. But the key difference is that my next-best alternative to Instacart is to just go to the grocery store myself. My next-best alternative to getting something delivered from Amazon isn’t to get it mor…

i am very confused why you have a higher bar for this than other services. would you actually create a spreadsheet that values your time (against other alternatives), gas/lyft/train fare to and back from the store, the extra costs associated with actually being in a retailer (and seeing the specials in store etc) and compare that against our offering? and again, we aren't the ones doing the markup -- those are coming…

No, I wouldn’t perform that calculation exactly and explicitly - but I absolutely think about my purchasing decisions in that way. I can give you ballpark estimates of how valuable my time is, how much time it takes and how much it costs to physically go to the grocery store, etc., and give you a ballpark breakeven point. I’d probably pay $20 for a grocery delivery, but I probably wouldn’t pay $50. But I have no idea where the all-in cost of the service actually falls, so I can’t compare. And I do hold other products and services to that same standard - for example, I regularly compare prices between retailers, except for trivial purchases for which comparison shopping isn’t likely to be worth my time.

As for the source of the markups, that really doesn’t matter to me. I care about the total difference in cost between using Instacart and going to the grocery store myself, irrespective of who that additional money goes to.

Re: Instacart has raised another $200M at a $4.2B valuation

#100

Post by pj_mukh »

jedberg wrote: post #5

From an outsiders perspective this looks like a bad investment. But I'm an outsider, so I know I don't have all the information. I would love to get an insiders perspective on why this is a good investment. My two main concerns: 1) Amazon and Whole Foods: Are they not a concern? 2) Economic downturn: Will people still order groceries at a premium?

"1) Amazon and Whole Foods: Are they not a concern?"

I'm guessing this raised happened because of Amazon/Whole Foods [1]

https://www.forbes.com/sites/bizcarson/2017/11/08/instacart-...

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