Instacart Gets Big Financing Infusion

Instacart, the fast-growing grocery delivery service, may be on the verge of something bigger, thanks to a new $44 million round of financing it received today.

The financing was led by tech investors Andreessen Horowitz, as well as three venture capital firms that previously invested in the company: Sequoia Capital, Khosla Ventures and Canaan Partners. The latest round of financing brings the total amount of capital it's raised to $55 million, according to published reports.

Instacart, a two-year-old company based in San Francisco, currently provides delivery from stores including Whole Foods Market and Costco in 10 cities including Boston, Washington, D.C., Philadelphia, New York City, Los Angeles, and the San Francisco Bay area. For most areas, delivery takes under two hours and costs $3.99.

Jeff Jordan, a partner at Andreessen Horowitz, said he was attracted to Instacart because it was a “people marketplace.” He said the company had an advantage over other grocery delivery services, including FreshDirect, because it did not rely on warehouses, trucks or other capital-intensive infrastructure.

The founder of Instacart, Apoorva Mehta, previously worked at Amazon in the “fulfillment” division, which oversees the delivery of orders from warehouses to customers.

Jordan wrote today in a blog post: “We’re making a bet that Instacart’s partnerships with brick-and-mortar grocery stores will be the winning play in grocery delivery to the home, with the ability to fend off competition from e-commerce companies that build out their own infrastructure.”