Instacart raises $220 million investment
Instacart announced this morning that it has closed a $220 million funding round, which the grocery delivery service says it will use toward category expansion and geographic growth.
The financing round was led by Kleiner Perkins Caufield & Byers, Comcast Ventures, the venture arm of NBCUniversal's parent company, as well as previous investors including top-tier venture capital firms such as Andreesen Horowitz, Khosla Ventures and Sequoia.
Instacart's funding now totals $275 million.
"Instacart's offering really resonates with customers," Apoorva Mehta, Instacart's founder and CEO, said in a statement. "We've got robust processes in place to support category and geographic expansion. Our vision is to help all types of local retailers get online and offer their customers one-hour delivery. This financing round will help us accelerate and scale those efforts."
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Founded in San Francisco in 2012, Instacart is trying to reinvent the traditional grocery delivery space. The company now has more than 4,000 personal shoppers. These are independent contractors who shop for and deliver customer orders in as little as one hour.
Delivery is currently available in a range of cities across the U.S. including Austin, Chicago, New York City and San Francisco.
Instacart charges $3.99 for two-hour delivery and $5.99 for one-hour delivery if users spend $35 or more. There's also "InstacartExpress," a $99-per-year membership.
The company says it's growing quickly, with revenue jumping 10 times in 2014 and doubling in the fourth quarter alone. (The company told The New York Times in December that 2014 revenue would be more than $100 million).
Instacart does face competition in this grocery delivery space with tech titans such as Amazon Fresh and Google Express. But Instacart's CEO, in an interview on CNBC's "FastMoney," said his company's model is different than rivals in that it contracts personal shoppers.
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"When you order your groceries, we connect you to one of our thousands of personal shoppers in our network who go to existing stores, such as Whole Foods, Costco and many more, and pick up your groceries and deliver them to you within one hour," Mehta said. "We don't hold any inventory, we don't have any warehouses, we don't have any trucks," he said.
Instacart also announced this morning that, in the past year, it has doubled its full-time employee base to 100.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.