Home Delivery From TJ’s and Costco Via Instacart Raises $8.5M
San Francisco-based Instacart has raised $8.5M led by Sequoia Capital. Also backing are Khosla Ventures, Canaan Partners, SVAngel and Paul Buchheit, the creator of Gmail.
Instacart will shop for and deliver groceries to your door within 2 hours for a fee of $3.99. You can order from Costco, Whole Foods or Trader Joes,which don’t deliver. The comparable here is not to Webvan or Amazon groceries but to a freelance car service like Lyft where anybody with a car can be a driver. We don’t get how at that price they will get someone to drive to a store and buy groceries then drive to the customer’s home.
The deal is notable because Sequoia’s Mike Mortiz was on the board of Webvan. He says“We had still been receiving outpatient therapy for our Webvan fiasco,” says Moritz, who’s joining the year-old company’s board. Still, with Instacart, he says, “There is little danger of a relapse.” Everyone we know who was involved with Webvan says that the model works and there are a number of companies providing it today. Other than the pricing we wonder what happens if Trader Joes and Costco start to home deliver.
Instacart today says it has 200 personal shoppers in the Bay Area. The Instacart app has maps of local supermarkets and can direct personal shoppers to specific aisles. Founder Apoorva Mehta says Instacart’s “secret sauce” is its fulfillment software, which allows the online retailer to combine orders placed at different times and fill them from different stores.