Instacart raises $400 million in fresh capital to cater to its expansion plans

Instacart, the grocery delivery startup based out of US, has raised $400 million of fresh capital at a valuation of $3.4 billion. The startup last raised $260 million at $2 billion valuation, thus it witnessed a significant valuation hike in current round. Although the company was in news for all the bad reasons i.e. it raised the grocery prices for consumers while cutting worker’s rates simultaneously, it is giving a tough fight to its competitors in the same industry i.e. Google Express and Amazon Prime Now. The funding round was backed by Sequoia Capital with $100 million contribution, along with a number of other investors including Wellcome Trust, Y Combinator Continuity, Andreessen Horowitz, FundersClub, Khosla Ventures, Kleiner Perkins Caufield & Byers (KPCB), Initialized Capital, Thrive Capital and Valiant Capital.

The startup, though, has multiple revenue streams. It charges customers a markup on groceries, plus a fee for delivering items to their doors. In addition, consumer packaged goods brands pay Instacart to advertise on its platform. And the startup strikes revenue share agreements with partners including grocery chains like Whole Foods. The latest fund raising will help it consolidate its presence in the domestic market, and force out the smaller players from the industry.