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Instacart Closes Latest Funding Round at $3.4B Valuation

149 points by rayuela 10y ago

CptJamesCook 10y ago
I have no comment on the valuation, but the service has made my life better. I no longer fight with my significant other about grocery store trips, and the house is always stocked with healthy, delicious food from Whole Foods. In 3 years, I'm not sure I've ever had a problem with an Instacart delivery, other than them occasionally forgetting items. edit: I should have mentioned that I'm not very picky about what is actually delivered, I'm just happy to have a bunch of fresh vegetables, fruit, and sparkling water stocked in my house at all times.
- MegaButts 10y ago
  As a counterpoint, I've never had a positive experience with Instacart. Whenever an item is missing (and sometimes I suspect they just can't find the item in store - one time they told me Whole Foods had no parmesan cheese at all), there is a frustrating back-and-forth texting frenzy to decide whether or not you want something else. Not only is it not what you want, it inevitably costs more, and a typical order will have something like a dozen texts from the shopper. In addition to this, the markups are way too high in my opinion. And since I'm not in the store, I never know what's on sale and can never take advantage of it. After about a half dozen tries I gave up on Instacart. It was so much worse than just going to the store myself.
  - jabzd 10y ago
    For what it is anecdotally worth, this has gotten better. It launched in Chicago at least a year ago and the first few orders my wife and I placed, I felt like I should have shopped myself for how many items weren't found and how much hand holding the shopper needed to replace items. We almost gave up on it, but with a baby in the house my wife kept with it and the replacement feedback loop has really gotten much better. Nowadays, out of a 25 item order, maybe 1 item is replaced and usually without a back-and-forth necessary (something reasonable is picked and you have the opportunity to reject it). Also, luckily, in the Chicago market most of the stores are "same-price-as-in-store" and the prices seem fairly reasonable where I mostly believe that.
  - CptJamesCook 10y ago
    You can set it so that they automatically replace the item with another option w/o communicating with you about it.
- xenihn 10y ago
  I don't know about you, but I love going grocery shopping, especially with a partner.
  - blakes 10y ago
    Funny, my wife and I are the same way. We love grocery shopping together, we get a nice solid hour or so of walking together looking and talking about food. What's so bad about that?
- stouset 10y ago
  My biggest gripes with them include what you just mentioned. I usually order from them when I'm making a large meal with typically uncommon ingredients. Today I'm making Cuban — I needed Seville oranges for mojo, yuca, rice paper for turrón, etc. Instacart is a gamble for me, and the UI is frustrating. I want to search for several items across stores and see which ones have them all. Instead I have to try stores one by one and see what's in stock. It's not enough to get me to stop using them, but it is annoying. But the really frustrating thing is when they claim a store has an item, but the shopper doesn't have much incentive to spend time looking for those hard-to-find but critical items. So lots of my orders have missing items which I then have to go out and find myself anyway. Also bad is that many items are hard to order specific quantities of. Some common produce items are sold by the pound, when I really just need one two count (e.g., onions). Worse, some items are labeled "per unit" but when I order two, they're converted to a weight value and I get fewer than I ordered. Again necessitating a trip to the store. I acknowledge that most people aren't making the kinds of meals I'm doing, and not suggesting they cater to my admittedly small market segment. But if they solved these problems, they would be amazing instead of "slightly worth it".
  - deleted 10y ago
    [deleted]
- bdcravens 10y ago
  Interesting that even though we have Whole Foods here (though not nearly as many as other parts of the country) it's not an option, only HEB (large regional grocer in Texas) (I'm in Houston)
jzig 10y ago
It's from those markups on sales tax [0]. [0]:https://np.reddit.com/r/boston/comments/5xj47l/ever_what_instacart_is_really_charging_you_in/ https://np.reddit.com/r/boston/comments/5xj47l/ever_what_ins...
- jdhawk 10y ago
  Wow, thats quite the markup. I wonder if thats because of the Instacart<->MarketBasket relationship, or if its similar for all Grocery Providers. I have not noticed a significant increase in prices (other than Tips & Delivery) over my previous weekly spend at H-E-B, but...I seem to have a lot more targeted shopping cart doing it over InstaCart. No matter what, for the hour+ it saves me, its probably well worth a <20% markup.
  - driverdan 10y ago
    They mark up HEB prices too although not as bad as this. It's the main reason I stopped using them.
- sillysaurus3 10y ago
  At this point, the store cost me $86.87. Instacart is now up to $142.47 after taxes and fees. This is a difference of $55.60, or 64%. I added a 10% tip (honestly, the shoppers deserve it, especially shopping in a grocery store on a Sunday for me), which brought my Instacart total to $154.80 for an $86.87 grocery bill, or a difference of $78.20. Ouch.
  - joering2 10y ago
    So it basically boils down to be a service for those few who either can make more than $78 in an hour working rather than shopping, or those who don't like shopping (spending all day in front of bunch of monitors I love to go shopping just to anonymously socialize for a moment). So as long as Instacart can survive with 1% of regular folks shopping with them, they are golden.
misiti3780 10y ago
I just logged in for the first time and used a lower manhattan zipcode, the options seemed fairly sparse. I assume that it is more useful in other parts of the country?
- dopamean 10y ago
  If you're in Manhattan Fresh Direct is the best choice IMO.
- bdcravens 10y ago
  In Houston we only have a large regional grocer (HEB) and Petco.
overcast 10y ago
What's the big deal with going to a grocery store, I mean seriously? I can understand a market for wealthy people, who just want someone else to do things for them, but to have enough market that the common person would find this worth it? Also, who wants someone picking through all their produce/meats/perishables? That's a pretty subjective thing.
- jtmarmon 10y ago
  speaking personally, in NYC (and presumably other cities where you often don't own a car and instead use public transit) it's quite a pain to get groceries. if you're walking back, you're carrying a lot of crap that's broken to breakage or spillage. then there's the risk you might have too much to carry yourself, then what do you do? getting them delivered is a big help and above a minor convenience for me - i just wouldn't buy groceries otherwise
  - dpflan 10y ago
    Would more frequent, smaller purchase trips be better or is the human traffic/congestion at the grocery store in NYC consistently just too much of a time drain to make that strategy reasonable? -- EDIT -- I'm curious about others' grocery buying habits because I don't use Instacart.
  - overcast 10y ago
    Ok, so let's say hypothetically this takes off. Now you have an army of grocery getters, for every person in NYC that doesn't leave to get their own groceries. All this does is offset all of those issues, to the person delivering your food. I guess if that convenience is worth the crazy money you have to pay for it sure, but I'd just go out to eat at that point. Especially in NYC.
    - tomjakubowski 10y ago
      Where I live in LA, the only grocery store in reasonable walking distance is a Whole Foods. It's actually cheaper for me to use a grocery delivery service for basics like milk, eggs, and produce every week than it is for me to buy the equivalents from Whole Foods. Delivery services are a no-brainer in my situation. (I do use a particular delivery service that has direct relationships with farmers, so that could partially explain why it's so cheap.)
saycheese 10y ago
For anyone that doesn't know how Instacart got into YC... "How Instacart Hacked YC": https://techcrunch.com/2012/08/18/how-instacart-hacked-yc/ https://techcrunch.com/2012/08/18/how-instacart-hacked-yc/
- swampthinker 10y ago
  Takeaway: Every "no" in tech can be solved with a 6 pack of beer and lots of persistence
  - sneak 10y ago
    ...and by being male and speaking English well. :)
    - sushid 10y ago
      I get that what you're saying is tongue-in-cheek, but yes, when you're usually trying to persuade anyone --person, organization, business, etc., having a grasp in the local language is almost always a requirement. In this particular example, however, those points are completely irrelevant as he just used his app to show off Instacart's delivery feature.
      - sneak 10y ago
        What I was saying (on International Women's Day) is that many opportunities are still afforded to people based on group identity that are denied to others, and that "all problems" can be solved trivially... for some people because of their inborn traits. It was a rejection of the "all problems can be overcome with sufficient gumption" theme of this thread. Beer, Maleness, being physically present in the USA, English - all of these are group signifiers. It saddens me to see HN users rejecting this on a day designed to highlight this inequality.
    - sergiotapia 10y ago
      Well, yes, you have to relate to the person you're trying to persuade. If I have a thick latino accent it's hard to persuade someone if they can't understand me.
dopamean 10y ago
I've found Instacart to be prohibitively expensive. When in New York I've used Fresh Direct and have never felt that I was being over charged. I have never had an order with Instacart that made me thing the increase in price was worth it. I'm sure a lot of people like it but I'm having a hard time being one of them.
- deleted 10y ago
  [deleted]
jpm_sd 10y ago
It must be really weird to work for Instacart. The shoppers spend the entire day in the supermarket, shopping for other people, waiting in the checkout line over and over again. The drivers are just sitting around in the grocery store parking lot most of the time. [0] [0] http://www.huffingtonpost.com/2015/02/02/instacart-workers_n_6548822.html http://www.huffingtonpost.com/2015/02/02/instacart-workers_n...
- duderific 10y ago
  You can tell the Instacart shoppers in the store by the way they charge around frantically, almost pushing people out of the way. They stick out like a sore thumb.
  - omarchowdhury 10y ago
    There's also the blue uniform. But yeah, they are pretty aggressive.
    - duderific 10y ago
      Hmm, I haven't seen the blue uniforms where I live (SF Bay Area.)
    - ArlenBales 10y ago
      > There's also the blue uniform. But yeah, they are pretty aggressive. Green? https://www.google.com/search?q=instacart+shopper&source=lnms&tbm=isch&sa=X&ved=0ahUKEwj_w76IgsjSAhVBU2MKHajHBysQ_AUICSgC&biw=1077&bih=1411#tbm=isch&q=instacart+shopper&* https://www.google.com/search?q=instacart+shopper&source=lnm...
- grandalf 10y ago
  I'd much rather have those jobs than many other manual labor jobs. At present many grocery stores are quite pleasant. I don't necessarily want to spend time there, but I'd do it for pay if the wage was competitive with my other best options. Not to mention the free samples. Shopping at Whole Foods all day would mean tons of free chips and guac, gourmet cheese, etc.
apike 10y ago
In Vancouver, our most popular local supermarket chain (Save-on-Foods) has started offering a service where you can order groceries on the web or in an app at the same prices as in the store. Then, you can either quickly pick up the collected groceries for free, or you can pay them a fee for delivery if you prefer. Even though the chain is local and the service is new, the software works well, the service works well, and overall it's a good offering. So my question is: how do investors project that an intermediary like Instacart can outcompete the same service provided by the supermarkets themselves? Doordash can compete on variety and speed, but most folks shop at the same one or two supermarkets all the time and rarely need groceries urgently.
- bsharitt 10y ago
  Here in the US, many Kroger and Walmart location have online ordering with pickup already in place. So I'd imaging it wouldn't be a big jump for either of them to offer delivery. My other local grocery chain, Publix, has gone the instacart route for their grocery delivery for now.
  - lavezzi 10y ago
    This is something that has baffled me since I moved to the US. In the UK, most of the major supermarkets have offered their own online delivery service for 10+ years: https://www.theguardian.com/money/2015/may/02/online-shopping-supermarkets-home-delivery https://www.theguardian.com/money/2015/may/02/online-shoppin... Why have the major retailers here been so slow off the mark?
    - omarchowdhury 10y ago
      OK look at the size of the UK and the US and you'll get closer to your answer why this hasn't been a major development in the US.
      - ghaff 10y ago
        Yeah, but there's no requirement for services to be national or to cover areas outside cities with insufficient density. I suspect it has more to do with large US supermarkets with large parking lots and high auto ownership. [ADDED: For example, Peapod is only available in some areas of the Northeast and Midwest]
Hydraulix989 10y ago
Those had to be some pretty bad terms.
tabeth 10y ago
Am I missing something or are of these "I'm too rich to be bothered with this task" services just creating a new servant class in the United States? This "servant class" has already existed, but now I feel as if it's being carved out of the already diminishing middle class.
- 27182818284 10y ago
  >Am I missing something I think you are a bit, because I use a lot of these services and am not rich Uber/Lyft isn't "I'm too rich to drive" it is "I'm drunk at the bars and need a ride home." or "The BART is closed because high winds blew stuff on the tracks and my flight leaves out of SFO in just a bit. "(Lyft really saved me on that one, no cabs around) Instacart isn't "I'm too rich to go grocery shopping" it is "I'm a mom of two kids, one of them has diarrhea right now, we need some things from the store" Etc - have to run but you get the idea
  - aianus 10y ago
    Even daily Uber use is cheaper than owning a car where I live (Toronto). Car insurance alone is $400 a month for a young single male.
- bdcravens 10y ago
  I think it's bringing services to people that were previously only available to those who could afford a personal assistant.
- ghaff 10y ago
  I'm honestly not sure how much larger on a percentage basis the labor pool is that's associated with "I'm too rich to be bothered with this task" services is. After all, lawn/cleaning/etc. services have long been a thing. So are babysitters, taxis, etc. For someone with enough money, they could have had full-time personal assistants, cooks, drivers, etc. What seems to be mostly new is that technology is making certain tasks more efficient and/or more efficient to time-slice in a way that people who are merely comfortably well-off but not really wealthy can afford them. (And the challenge is that tasks that are sliced up that way need to be sufficiently cookie-cutter that the context and knowledge a full-time assistant might have aren't required.)
simonkjohnson 10y ago
Not entirely on topic, but in Denmark we have something similar called "Vigo", where other people buy your groceries for you, and deliver them to you. The fee you pay is fixed (about 6 USD). People who want to make a little extra cash then log on to the app, look for tasks nearby, and pick a task they want to complete. Then they buy it, deliver it, and get paid. The stores are partnering with the app to provide their inventory, so that you can pick what you need and expect it to actually be available for your shopper to buy. Curious to see if something like Instacart would break through here.
webnrrd2k 10y ago
If there is as much money to be made as Instacart's valuation implies, then it's just a matter of time until the big chains, at least, start offering their own online shopping. This strikes me as another version of AutoByTel.com Remember them? They worked between you and the dealership, and generally got you a much better price on a car, usually the fleet rate. They did well until dealerships figured out how to use the web, and then the company hasn't been anywhere near as relevant for a long time. It tough existing between web-based customers and physical dealers. There isn't a lot of loyalty, so as soon as tgere is a better price customers will change sites. Also, Autobytel's business is really offering highly qualified sales leads to dealerships. The basics are nothing fancier than that. I see the same thing for Instacart. Grocery stores tend to be effective at shipping stuff around, but tge same "shoping" experience has worked for many, many years. It seems like the grocery stores have a lot more power than Instacart, and Instacart is going to have a very hard time getting between customers and stores. It's going to be hard to make a profit when stores offer free/cheap delivery and develop their own shopping apps.
- up_and_up 10y ago
  > If there is as much money to be made as Instacart's valuation implies, then it's just a matter of time until the big chains, at least, start offering their own online shopping. They already do. We sometimes use personal shopping at Whole foods, it costs like $15. You drive up and pick up the groceries. Super easy. Another smaller chain store, for $20, they will shop and deliver to your door. While great in terms of saving time, the problem is that you sometimes dont get exactly the item you would have picked nor get the option to pick up extra items or things on sale.
  - wincy 10y ago
    Where I live in the midwest, one of the chains has started doing delivery or curb side pickup for free if you spend at least $100. We started shopping there exclusively for awhile because of it, super convenient.
  - kornish 10y ago
    > While great in terms of saving time, the problem is that you sometimes dont get exactly the item you would have picked nor get the option to pick up extra items or things on sale. Seems to me that the grocery stores have an advantage of Instacart in this, actually, because they have access to their own inventory systems while Instacart doesn't. To vertically integrate delivery would make a lot of sense.
asciimo 10y ago
I expected Whole Foods to acquire them. They have so much infrastructure on site at popular Whole Foods locations that it seemed inevitable.
- ironchief 10y ago
  I thought so too. However, the valuation of Instacart is now in the range of Whole Foods $3.4B vs $9.3B Expect to see much rougher competition from Whole Foods. They have quietly already started this with their coupon app[1] (the wedge) and pickup (powered by instacart)[2] [1]https://www.theguardian.com/business/2016/feb/10/whole-foods-introduces-digital-coupons-app-shoppering https://www.theguardian.com/business/2016/feb/10/whole-foods... [2]https://pickup.wholefoodsmarket.com/ https://pickup.wholefoodsmarket.com/
  - marrone12 10y ago
    The valuation doesn't necessitate what they may ever sell at. It'd be very easy for whole foods to acquire instacart after their hypothetical exit never happens and their valuation tanks.
- prostoalex 10y ago
  Why can't Whole Foods just open new stores in markets with high Instacart customer base? They did it in downtown LA. Seems like they find Instacart useful for their site development and expansion.
jonnynezbo 10y ago
We use InstaCart to keep the fridge and pantry stocked at my small company. It works like a charm, and saves us nearly 2 hours a week. You get "free" deliveries with InstaCart Express for $149/year. The website and iPhone app are easy to use, and interaction with the shopper works almost flawlessly. Honestly, it's a no-brainer for us.
- paulcole 10y ago
  Wow! Almost 2 hours a week! What do you do with the extra time?
  - puranjay 10y ago
    Why, post on HNews, of course!
largehotcoffee 10y ago
>$400 million round of venture funding As it stands now, I believe Instacart will fail and this money will be wasted. The only hope for the company is to be acquired by someone larger looking to bootstrap grocery delivery (or maybe Uber or Amazon or something). I regularly use Safeway grocery delivery https://shop.safeway.com/ecom/home https://shop.safeway.com/ecom/home and I've always been happy. Delivery fees can get as low as $4 while grocery items are (I assume) the same price as inside the store. Instacart needs to do something different. Why don't they just copy Blue Apron/Hello Fresh and offer meal packages with all the ingredients and recipe? Hell, I'd be way more interested in the service if I could get that along with groceries. Postmates Blue Apron Hello Fresh Instacart Amazon Fresh etc etc These companies need to become each other, before Amazon becomes all of them. It seems like the biggest innovation from Instacart I could find was "the company wasn't collecting beverage can and bottle deposits accurately until recently, and the fix has increased gross margins by 25 cents on average deliveries nationwide.". This company is doomed. Side note, I still can't get over the fact that I can't view a single item they offer without creating an account. Even going to browse their website for this comment, I walk away disappointed.
euphoria83 10y ago
I have used their service many times and am in general not satisfied. Items are missed, the quality of produce picked is not the best, items ordered are not found and replaced, same day delivery is almost gone as an option now, the service fee of 10% stinks of mal-intent. Also, I am not sure how they will compete with Amazon Pantry/Prime or Google Express. The investment and valuation seem bloated.
coupdejarnac 10y ago
Are they actually making money, or are they going to be another fantastic short-sell opportunity, a la Snapchat?
dkarapetyan 10y ago
Obviously the numbers still don't add up for a delivery business so what exactly is driving the valuation up?

149 points by rayuela 10y ago

I have no comment on the valuation, but the service has made my life better. I no longer fight with my significant other about grocery store trips, and the house is always stocked with healthy, delicious food from Whole Foods. In 3 years, I'm not sure I've ever had a problem with an Instacart delivery, other than them occasionally forgetting items. edit: I should have mentioned that I'm not very picky about what is actually delivered, I'm just happy to have a bunch of fresh vegetables, fruit, and sparkling water stocked in my house at all times.

MegaButts 10y ago
As a counterpoint, I've never had a positive experience with Instacart. Whenever an item is missing (and sometimes I suspect they just can't find the item in store - one time they told me Whole Foods had no parmesan cheese at all), there is a frustrating back-and-forth texting frenzy to decide whether or not you want something else. Not only is it not what you want, it inevitably costs more, and a typical order will have something like a dozen texts from the shopper. In addition to this, the markups are way too high in my opinion. And since I'm not in the store, I never know what's on sale and can never take advantage of it. After about a half dozen tries I gave up on Instacart. It was so much worse than just going to the store myself.
- jabzd 10y ago
  For what it is anecdotally worth, this has gotten better. It launched in Chicago at least a year ago and the first few orders my wife and I placed, I felt like I should have shopped myself for how many items weren't found and how much hand holding the shopper needed to replace items. We almost gave up on it, but with a baby in the house my wife kept with it and the replacement feedback loop has really gotten much better. Nowadays, out of a 25 item order, maybe 1 item is replaced and usually without a back-and-forth necessary (something reasonable is picked and you have the opportunity to reject it). Also, luckily, in the Chicago market most of the stores are "same-price-as-in-store" and the prices seem fairly reasonable where I mostly believe that.
- CptJamesCook 10y ago
  You can set it so that they automatically replace the item with another option w/o communicating with you about it.
xenihn 10y ago
I don't know about you, but I love going grocery shopping, especially with a partner.
- blakes 10y ago
  Funny, my wife and I are the same way. We love grocery shopping together, we get a nice solid hour or so of walking together looking and talking about food. What's so bad about that?
stouset 10y ago
My biggest gripes with them include what you just mentioned. I usually order from them when I'm making a large meal with typically uncommon ingredients. Today I'm making Cuban — I needed Seville oranges for mojo, yuca, rice paper for turrón, etc. Instacart is a gamble for me, and the UI is frustrating. I want to search for several items across stores and see which ones have them all. Instead I have to try stores one by one and see what's in stock. It's not enough to get me to stop using them, but it is annoying. But the really frustrating thing is when they claim a store has an item, but the shopper doesn't have much incentive to spend time looking for those hard-to-find but critical items. So lots of my orders have missing items which I then have to go out and find myself anyway. Also bad is that many items are hard to order specific quantities of. Some common produce items are sold by the pound, when I really just need one two count (e.g., onions). Worse, some items are labeled "per unit" but when I order two, they're converted to a weight value and I get fewer than I ordered. Again necessitating a trip to the store. I acknowledge that most people aren't making the kinds of meals I'm doing, and not suggesting they cater to my admittedly small market segment. But if they solved these problems, they would be amazing instead of "slightly worth it".
- deleted 10y ago
  [deleted]
bdcravens 10y ago
Interesting that even though we have Whole Foods here (though not nearly as many as other parts of the country) it's not an option, only HEB (large regional grocer in Texas) (I'm in Houston)

jzig 10y ago

It's from those markups on sales tax [0]. [0]:https://np.reddit.com/r/boston/comments/5xj47l/ever_what_instacart_is_really_charging_you_in/ https://np.reddit.com/r/boston/comments/5xj47l/ever_what_ins...

jdhawk 10y ago
Wow, thats quite the markup. I wonder if thats because of the Instacart<->MarketBasket relationship, or if its similar for all Grocery Providers. I have not noticed a significant increase in prices (other than Tips & Delivery) over my previous weekly spend at H-E-B, but...I seem to have a lot more targeted shopping cart doing it over InstaCart. No matter what, for the hour+ it saves me, its probably well worth a <20% markup.
- driverdan 10y ago
  They mark up HEB prices too although not as bad as this. It's the main reason I stopped using them.
sillysaurus3 10y ago
At this point, the store cost me $86.87. Instacart is now up to $142.47 after taxes and fees. This is a difference of $55.60, or 64%. I added a 10% tip (honestly, the shoppers deserve it, especially shopping in a grocery store on a Sunday for me), which brought my Instacart total to $154.80 for an $86.87 grocery bill, or a difference of $78.20. Ouch.
- joering2 10y ago
  So it basically boils down to be a service for those few who either can make more than $78 in an hour working rather than shopping, or those who don't like shopping (spending all day in front of bunch of monitors I love to go shopping just to anonymously socialize for a moment). So as long as Instacart can survive with 1% of regular folks shopping with them, they are golden.

misiti3780 10y ago

I just logged in for the first time and used a lower manhattan zipcode, the options seemed fairly sparse. I assume that it is more useful in other parts of the country?

dopamean 10y ago
If you're in Manhattan Fresh Direct is the best choice IMO.
bdcravens 10y ago
In Houston we only have a large regional grocer (HEB) and Petco.

overcast 10y ago

What's the big deal with going to a grocery store, I mean seriously? I can understand a market for wealthy people, who just want someone else to do things for them, but to have enough market that the common person would find this worth it? Also, who wants someone picking through all their produce/meats/perishables? That's a pretty subjective thing.

jtmarmon 10y ago
speaking personally, in NYC (and presumably other cities where you often don't own a car and instead use public transit) it's quite a pain to get groceries. if you're walking back, you're carrying a lot of crap that's broken to breakage or spillage. then there's the risk you might have too much to carry yourself, then what do you do? getting them delivered is a big help and above a minor convenience for me - i just wouldn't buy groceries otherwise
- dpflan 10y ago
  Would more frequent, smaller purchase trips be better or is the human traffic/congestion at the grocery store in NYC consistently just too much of a time drain to make that strategy reasonable? -- EDIT -- I'm curious about others' grocery buying habits because I don't use Instacart.
- overcast 10y ago
  Ok, so let's say hypothetically this takes off. Now you have an army of grocery getters, for every person in NYC that doesn't leave to get their own groceries. All this does is offset all of those issues, to the person delivering your food. I guess if that convenience is worth the crazy money you have to pay for it sure, but I'd just go out to eat at that point. Especially in NYC.
  - tomjakubowski 10y ago
    Where I live in LA, the only grocery store in reasonable walking distance is a Whole Foods. It's actually cheaper for me to use a grocery delivery service for basics like milk, eggs, and produce every week than it is for me to buy the equivalents from Whole Foods. Delivery services are a no-brainer in my situation. (I do use a particular delivery service that has direct relationships with farmers, so that could partially explain why it's so cheap.)

saycheese 10y ago

For anyone that doesn't know how Instacart got into YC... "How Instacart Hacked YC": https://techcrunch.com/2012/08/18/how-instacart-hacked-yc/ https://techcrunch.com/2012/08/18/how-instacart-hacked-yc/

swampthinker 10y ago
Takeaway: Every "no" in tech can be solved with a 6 pack of beer and lots of persistence
- sneak 10y ago
  ...and by being male and speaking English well. :)
  - sushid 10y ago
    I get that what you're saying is tongue-in-cheek, but yes, when you're usually trying to persuade anyone --person, organization, business, etc., having a grasp in the local language is almost always a requirement. In this particular example, however, those points are completely irrelevant as he just used his app to show off Instacart's delivery feature.
    - sneak 10y ago
      What I was saying (on International Women's Day) is that many opportunities are still afforded to people based on group identity that are denied to others, and that "all problems" can be solved trivially... for some people because of their inborn traits. It was a rejection of the "all problems can be overcome with sufficient gumption" theme of this thread. Beer, Maleness, being physically present in the USA, English - all of these are group signifiers. It saddens me to see HN users rejecting this on a day designed to highlight this inequality.
  - sergiotapia 10y ago
    Well, yes, you have to relate to the person you're trying to persuade. If I have a thick latino accent it's hard to persuade someone if they can't understand me.

dopamean 10y ago

I've found Instacart to be prohibitively expensive. When in New York I've used Fresh Direct and have never felt that I was being over charged. I have never had an order with Instacart that made me thing the increase in price was worth it. I'm sure a lot of people like it but I'm having a hard time being one of them.

deleted 10y ago
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jpm_sd 10y ago

It must be really weird to work for Instacart. The shoppers spend the entire day in the supermarket, shopping for other people, waiting in the checkout line over and over again. The drivers are just sitting around in the grocery store parking lot most of the time. [0] [0] http://www.huffingtonpost.com/2015/02/02/instacart-workers_n_6548822.html http://www.huffingtonpost.com/2015/02/02/instacart-workers_n...

duderific 10y ago
You can tell the Instacart shoppers in the store by the way they charge around frantically, almost pushing people out of the way. They stick out like a sore thumb.
- omarchowdhury 10y ago
  There's also the blue uniform. But yeah, they are pretty aggressive.
  - duderific 10y ago
    Hmm, I haven't seen the blue uniforms where I live (SF Bay Area.)
  - ArlenBales 10y ago
    > There's also the blue uniform. But yeah, they are pretty aggressive. Green? https://www.google.com/search?q=instacart+shopper&source=lnms&tbm=isch&sa=X&ved=0ahUKEwj_w76IgsjSAhVBU2MKHajHBysQ_AUICSgC&biw=1077&bih=1411#tbm=isch&q=instacart+shopper&* https://www.google.com/search?q=instacart+shopper&source=lnm...
grandalf 10y ago
I'd much rather have those jobs than many other manual labor jobs. At present many grocery stores are quite pleasant. I don't necessarily want to spend time there, but I'd do it for pay if the wage was competitive with my other best options. Not to mention the free samples. Shopping at Whole Foods all day would mean tons of free chips and guac, gourmet cheese, etc.

apike 10y ago

In Vancouver, our most popular local supermarket chain (Save-on-Foods) has started offering a service where you can order groceries on the web or in an app at the same prices as in the store. Then, you can either quickly pick up the collected groceries for free, or you can pay them a fee for delivery if you prefer. Even though the chain is local and the service is new, the software works well, the service works well, and overall it's a good offering. So my question is: how do investors project that an intermediary like Instacart can outcompete the same service provided by the supermarkets themselves? Doordash can compete on variety and speed, but most folks shop at the same one or two supermarkets all the time and rarely need groceries urgently.

bsharitt 10y ago
Here in the US, many Kroger and Walmart location have online ordering with pickup already in place. So I'd imaging it wouldn't be a big jump for either of them to offer delivery. My other local grocery chain, Publix, has gone the instacart route for their grocery delivery for now.
- lavezzi 10y ago
  This is something that has baffled me since I moved to the US. In the UK, most of the major supermarkets have offered their own online delivery service for 10+ years: https://www.theguardian.com/money/2015/may/02/online-shopping-supermarkets-home-delivery https://www.theguardian.com/money/2015/may/02/online-shoppin... Why have the major retailers here been so slow off the mark?
  - omarchowdhury 10y ago
    OK look at the size of the UK and the US and you'll get closer to your answer why this hasn't been a major development in the US.
    - ghaff 10y ago
      Yeah, but there's no requirement for services to be national or to cover areas outside cities with insufficient density. I suspect it has more to do with large US supermarkets with large parking lots and high auto ownership. [ADDED: For example, Peapod is only available in some areas of the Northeast and Midwest]

Hydraulix989 10y ago

Those had to be some pretty bad terms.

tabeth 10y ago

Am I missing something or are of these "I'm too rich to be bothered with this task" services just creating a new servant class in the United States? This "servant class" has already existed, but now I feel as if it's being carved out of the already diminishing middle class.

27182818284 10y ago
>Am I missing something I think you are a bit, because I use a lot of these services and am not rich Uber/Lyft isn't "I'm too rich to drive" it is "I'm drunk at the bars and need a ride home." or "The BART is closed because high winds blew stuff on the tracks and my flight leaves out of SFO in just a bit. "(Lyft really saved me on that one, no cabs around) Instacart isn't "I'm too rich to go grocery shopping" it is "I'm a mom of two kids, one of them has diarrhea right now, we need some things from the store" Etc - have to run but you get the idea
- aianus 10y ago
  Even daily Uber use is cheaper than owning a car where I live (Toronto). Car insurance alone is $400 a month for a young single male.
bdcravens 10y ago
I think it's bringing services to people that were previously only available to those who could afford a personal assistant.
ghaff 10y ago
I'm honestly not sure how much larger on a percentage basis the labor pool is that's associated with "I'm too rich to be bothered with this task" services is. After all, lawn/cleaning/etc. services have long been a thing. So are babysitters, taxis, etc. For someone with enough money, they could have had full-time personal assistants, cooks, drivers, etc. What seems to be mostly new is that technology is making certain tasks more efficient and/or more efficient to time-slice in a way that people who are merely comfortably well-off but not really wealthy can afford them. (And the challenge is that tasks that are sliced up that way need to be sufficiently cookie-cutter that the context and knowledge a full-time assistant might have aren't required.)

simonkjohnson 10y ago

Not entirely on topic, but in Denmark we have something similar called "Vigo", where other people buy your groceries for you, and deliver them to you. The fee you pay is fixed (about 6 USD). People who want to make a little extra cash then log on to the app, look for tasks nearby, and pick a task they want to complete. Then they buy it, deliver it, and get paid. The stores are partnering with the app to provide their inventory, so that you can pick what you need and expect it to actually be available for your shopper to buy. Curious to see if something like Instacart would break through here.

webnrrd2k 10y ago

If there is as much money to be made as Instacart's valuation implies, then it's just a matter of time until the big chains, at least, start offering their own online shopping. This strikes me as another version of AutoByTel.com Remember them? They worked between you and the dealership, and generally got you a much better price on a car, usually the fleet rate. They did well until dealerships figured out how to use the web, and then the company hasn't been anywhere near as relevant for a long time. It tough existing between web-based customers and physical dealers. There isn't a lot of loyalty, so as soon as tgere is a better price customers will change sites. Also, Autobytel's business is really offering highly qualified sales leads to dealerships. The basics are nothing fancier than that. I see the same thing for Instacart. Grocery stores tend to be effective at shipping stuff around, but tge same "shoping" experience has worked for many, many years. It seems like the grocery stores have a lot more power than Instacart, and Instacart is going to have a very hard time getting between customers and stores. It's going to be hard to make a profit when stores offer free/cheap delivery and develop their own shopping apps.

up_and_up 10y ago
> If there is as much money to be made as Instacart's valuation implies, then it's just a matter of time until the big chains, at least, start offering their own online shopping. They already do. We sometimes use personal shopping at Whole foods, it costs like $15. You drive up and pick up the groceries. Super easy. Another smaller chain store, for $20, they will shop and deliver to your door. While great in terms of saving time, the problem is that you sometimes dont get exactly the item you would have picked nor get the option to pick up extra items or things on sale.
- wincy 10y ago
  Where I live in the midwest, one of the chains has started doing delivery or curb side pickup for free if you spend at least $100. We started shopping there exclusively for awhile because of it, super convenient.
- kornish 10y ago
  > While great in terms of saving time, the problem is that you sometimes dont get exactly the item you would have picked nor get the option to pick up extra items or things on sale. Seems to me that the grocery stores have an advantage of Instacart in this, actually, because they have access to their own inventory systems while Instacart doesn't. To vertically integrate delivery would make a lot of sense.

asciimo 10y ago

I expected Whole Foods to acquire them. They have so much infrastructure on site at popular Whole Foods locations that it seemed inevitable.

ironchief 10y ago
I thought so too. However, the valuation of Instacart is now in the range of Whole Foods $3.4B vs $9.3B Expect to see much rougher competition from Whole Foods. They have quietly already started this with their coupon app[1] (the wedge) and pickup (powered by instacart)[2] [1]https://www.theguardian.com/business/2016/feb/10/whole-foods-introduces-digital-coupons-app-shoppering https://www.theguardian.com/business/2016/feb/10/whole-foods... [2]https://pickup.wholefoodsmarket.com/ https://pickup.wholefoodsmarket.com/
- marrone12 10y ago
  The valuation doesn't necessitate what they may ever sell at. It'd be very easy for whole foods to acquire instacart after their hypothetical exit never happens and their valuation tanks.
prostoalex 10y ago
Why can't Whole Foods just open new stores in markets with high Instacart customer base? They did it in downtown LA. Seems like they find Instacart useful for their site development and expansion.

jonnynezbo 10y ago

We use InstaCart to keep the fridge and pantry stocked at my small company. It works like a charm, and saves us nearly 2 hours a week. You get "free" deliveries with InstaCart Express for $149/year. The website and iPhone app are easy to use, and interaction with the shopper works almost flawlessly. Honestly, it's a no-brainer for us.

paulcole 10y ago
Wow! Almost 2 hours a week! What do you do with the extra time?
- puranjay 10y ago
  Why, post on HNews, of course!

largehotcoffee 10y ago

>$400 million round of venture funding As it stands now, I believe Instacart will fail and this money will be wasted. The only hope for the company is to be acquired by someone larger looking to bootstrap grocery delivery (or maybe Uber or Amazon or something). I regularly use Safeway grocery delivery https://shop.safeway.com/ecom/home https://shop.safeway.com/ecom/home and I've always been happy. Delivery fees can get as low as $4 while grocery items are (I assume) the same price as inside the store. Instacart needs to do something different. Why don't they just copy Blue Apron/Hello Fresh and offer meal packages with all the ingredients and recipe? Hell, I'd be way more interested in the service if I could get that along with groceries. Postmates Blue Apron Hello Fresh Instacart Amazon Fresh etc etc These companies need to become each other, before Amazon becomes all of them. It seems like the biggest innovation from Instacart I could find was "the company wasn't collecting beverage can and bottle deposits accurately until recently, and the fix has increased gross margins by 25 cents on average deliveries nationwide.". This company is doomed. Side note, I still can't get over the fact that I can't view a single item they offer without creating an account. Even going to browse their website for this comment, I walk away disappointed.

euphoria83 10y ago

I have used their service many times and am in general not satisfied. Items are missed, the quality of produce picked is not the best, items ordered are not found and replaced, same day delivery is almost gone as an option now, the service fee of 10% stinks of mal-intent. Also, I am not sure how they will compete with Amazon Pantry/Prime or Google Express. The investment and valuation seem bloated.

coupdejarnac 10y ago

Are they actually making money, or are they going to be another fantastic short-sell opportunity, a la Snapchat?

dkarapetyan 10y ago

Obviously the numbers still don't add up for a delivery business so what exactly is driving the valuation up?