Instacart, the grocery supplier, announced Tuesday that it had raised an additional $ 265 million for $ 39 billion in funding, more than doubling its valuation for the second time in a year.
Andreessen Horowitz and Sequoia Capital, existing investors in Instacart, participated in the most recent funding of the eight-year-old start-up. Last year Instacart launched two funding rounds totaling $ 525 million. It was previously valued at $ 17.7 billion.
The pandemic has accelerated Instacart’s growth. Customers who do not want to shop in stores use the company’s app-based grocery ordering service. Lay-off workers have also turned to gig economy jobs like shopping at Instacart to make money. Instacart now has 500,000 buyers working on the contract.
“Last year ushered in a new normal and changed the way people shop for groceries and merchandise,” said Nick Giovanni, Instacart’s chief financial officer, in a statement.
Instacart weathered criticism of its business model as it expanded. Earlier this year, the layoffs of some of Instacart’s few unionized workers led to allegations of union breach. According to grocery stores, the app’s fees of around 10 percent have made it difficult to make a profit.
The company supplies goods from 600 retailers in 45,000 stores across the United States and Canada. It has expanded beyond groceries to include office supplies, sporting goods, prescription drugs, and pet supplies from chains like Staples, Dick’s Sporting Goods, CVS, and Petco.
Instacart said it plans to use the new funds to hire more employees and expand business areas, including advertising for consumer products companies and enterprise software for retailers.
In a statement, Andreessen Horowitz’s partner Jeff Jordan said his company was impressed with the way Instacart showed resilience to the pandemic and “reached the moment of 2020”.
The company was named as a candidate for the IPO. In January, she appointed Mr. Giovanni, formerly Goldman Sachs, as Chief Financial Officer.