Delivery company Instacart yesterday said that it has raised $600 million as part of a new financing round, which it said raises the company’s valuation to $7.6 billion.
The company said that it “expects to deploy the new capital … in a number of ways, including further expansion in North America, marketing investments to increase awareness of Instacart at our retail partners' stores, and recruiting world-class engineering and product development talent.”
In another company-related announcement yesterday, Minnesota-based Lunds and Byerlys said that it will use Instacart for one-hour deliveries, while continuing to use its own in-house service for deliveries with a four-hour leads time.
The company said that it “expects to deploy the new capital … in a number of ways, including further expansion in North America, marketing investments to increase awareness of Instacart at our retail partners' stores, and recruiting world-class engineering and product development talent.”
In another company-related announcement yesterday, Minnesota-based Lunds and Byerlys said that it will use Instacart for one-hour deliveries, while continuing to use its own in-house service for deliveries with a four-hour leads time.
- KC's View:
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MNB readers won’t be surprised that I rolled my eyes a little bit when I read about the new financing round. Sure, that’s a lot of money, and Instacart has done a good job of driving up its valuation while providing retailers with an easy solution to their e-commerce problems. But easy solutions rarely are the best ones, and Instacart’s service is not a wise long-term solution for any retailer.
I get why Lunds and Byerlys made this move … but I just hope it is a stopgap measure.
There was a passage from the Star Tribune story about the Lunds and Byerlys deal that made my point for me … after explaining that the iconic supermarket chain would now be working with Instacart on a limited basis, the paper wrote, “Consumers can also order Instacart delivery locally from Aldi, Costco, Cub, CVS, Lakewinds Co-op, Liquor Boy, Petco, Sur La Table, United Noodles, Wedge Co-op and Whole Foods.”
My question is simple: Does this sound like differentiation to you? I love Lunds and Byerlys, and I have friends there, but I am dubious.
