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Instacart has raised another $200M at a $4.2B valuation

126 points by smaili 9y ago

spiderPig 9y ago
Wow, so they've raised close to $1bn so far! Wonder how many of these delivery services like Doordash, Postmates, Grubhub, Caviar, Uber eats etc will survive the next economic downturn.
- dalbasal 9y ago
  That may not matter, necessarily. If 3 of these fail but one becomes a £10bn company, that's ok. Some investors win, others lose, it averages out to normal returns. VC is supposed to be risky.
- jimmy1 9y ago
  As a former restaurateur, I would like to tell you, contrary to popular opinion, during the last major economic downturn in 2008 (2009 for me since I was in a southern state, and the downturn hit us a bit later than most), spending money out to eat actually went up. The theory goes a little something like this -- people actually spend more money on themselves to cheer themselves up when life gets shittier. So folks, too depressed to cook, would go out and at least try to eat, drink, and be merry. Now how this correlates to these dining services has yet to be determined.
  - jotm 9y ago
    Surprisingly, most poor people order takeaways the most around here, as well.
    - jimmy1 9y ago
      It's not surprising to me, it all ties back to the reality that it is more expensive to be poor than not. If you are poor, you most likely don't have the ability to keep a kitchen stocked with cooking essentials (spices are expensive), pots, pans, the increased water and heating cost to run a dishwasher and oven. Never mind the fact that most people living paycheck to paycheck are going from job to job and are physically exhausted at the end of the day. And that's for the people who were able to afford housing, then you have poor people stuck in shitty motels because they can't afford first month's rent and a security deposit. Those usually only have microwaves and a mini fridge. Often times, going to McDonalds is your best option. The Government also subsidizes Big Food, so that factors. Getting 4 McDoubles for 4 dollars in 5 minutes driving through the drive thru next to your house so you can get back home to your kids and see them for the couple hours you have in between jobs versus spending 30 min to an hour buying a pound of ground beef, buns, cheese, lettuce, tomatos, the energy and utilities cost and the lost opportunity cost of the time spent cooking and cleaning when you could be working, it isn't hard to see why poor people choose the fast food.
      - maxerickson 9y ago
        The energy and other utilities for 1 meal will be like $0.30. So that barely registers compared to time and ingredients.
        jimmy1 9y ago
        Bad credit affects utility costs. Most impoverished people have bad credit. Again, being poor costs more in almost all areas of life in America. Contrary to popular belief, utilities are not a right. Utility companies have the right to refuse you if you have enough delinquent payments, can't front the deposit (if you have bad credit) or even outright refuse you (if you have terrible credit). Even on the FTC's website, their advice if you have trouble paying your utilities is basically to "budget harder"
        jotm 9y ago
        Wow, I didn't know it was that bad. Being denied utilities based on credit score... damn. Do you have prepaid meters by any chance? It's the standard option for those who fail to pay their bills on time here. With a prepaid, you load up money and it turns off your gas/electrical once the prepaid amount is exhausted. Water is exempt, no one can turn off the water at a residential address, no matter how long you haven't paid...
    - ggg9990 9y ago
      It’s because low paid work is the hardest, physically and mentally, so poor people don’t have the energy to cook, and with McDonalds available, they don’t really need to when you can get a dinner for $2.
  - radiorental 9y ago
    It's call the Lipstick Effect, aka Lipstick Recession Indicator. https://www.investopedia.com/terms/l/lipstick-effect.asp https://www.investopedia.com/terms/l/lipstick-effect.asp And just as a somewhat tangential but related story to the phenomenon, British soldiers distributed lipstick tp the liberated but gravely ill women of the Bergen-Belsen concetration camp in WWII, it lifted their moral just enough in some cases to help save their lives.
    - jimmy1 9y ago
      I love this. Never knew it had a name. Thanks for showing me that. I also love all history related to WWII, so thanks for giving me Wikipedia food for 3 hours tonight.
  - lazerpants 9y ago
    I'd like to posit an alternative argument. That the increase in business was more due to demographic shifts than to the "lipstick effect". Around 2007 the entire generation of millennials was finally of age to go out and spend money eating. This is the largest demographic group of Americans. Even if people 16-30 were spending less money per person eating out, the volume of individuals spending money on eating out was sufficiently high to increase business.
- whoisjuan 9y ago
  UberEats will likely win in the long run... On-demand is just a long-term game of leading and losing money... Uber has the distribution and the money that will allow them to lead and lose for longer than anyone else. How much money can all these companies lose before finding themselves in a dead-end? (no positive cash-flow, no more investors willing to invest, no more local market first mover advantage). People who deliver for these companies will do it for the ones that can give them more business and larger commissions. People who order from these companies will do it from the ones with the largest selection and the lowest fees... Only Uber can pull-off the economies of scale to arbitrate those two sides without running out of money.
  - mathattack 9y ago
    UberEats will struggle unless they didn’t service issues. They are slaves to the whims of drivers who can cancel orders at any time.
matte_black 9y ago
Terrifying, considering this one will be one of the first companies to go the minute this roaring economy goes sour.
- deleted 9y ago
  [deleted]
ananab 9y ago
Gotta make easy money while you can
- sctb 9y ago
  We ban accounts that won't post civilly and substantively, so please read and follow the site guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html.
jedberg 9y ago
From an outsiders perspective this looks like a bad investment. But I'm an outsider, so I know I don't have all the information. I would love to get an insiders perspective on why this is a good investment. My two main concerns: 1) Amazon and Whole Foods: Are they not a concern? 2) Economic downturn: Will people still order groceries at a premium?
- rabidonrails 9y ago
  >>1) Amazon and Whole Foods: Are they not a concern? I think they are a concern, not necessarily to Instacart but to all of the grocery chains that need to compete with Amazon/WF. Since Instacart already has the tech/infra/domain knowledge to build this service out, Instacart's value goes shooting up.
- buildawesome 9y ago
  opinions: 1. instacart gives companies besides amzn/wf a logistics platform to ship out retail goods. It makes these other companies more competitive. This is why you see a company like Target acquire Shipt. 2. it won't be a premium if self-driving cars exist. it might be a waiting game for investors, just like how uber and lyft are floated right now.
- cryptoz 9y ago
  > 2) Economic downturn: Will people still order groceries at a premium? I'm not sure about the data and large trends for this, but here's my anecdote: Right now Instacart is the cheapest way for me to get groceries. Someone with a gun took my driver's license from me a few months ago, my bike was dismantled by thiefs, and I don't live within walking distance of a grocery store. Lyft/Uber there and back is $20. Bus there and back is $6 (but with added time and stress). Instacart is $5-6. Yes, eventually, it will be easier for me to bike there or to drive there, but not right now. Right now the cheapest way for me to get a large grocery trip done is Instacart. So maybe they could survive. Not everyone is in my position, but someone who works two jobs, doesn't have a car and lives far from the store...that could describe a lot of people in the near future.
  - 9y ago
jxub 9y ago
Another valueless "disruption" being injected play money to destabilise the semblance of healthy capitalism we had on a macro level. Venture capital enables subsidies to speculative companies in hope of a small probability of profit, which destroys perfectly good small companies [0] , and acts as a libertarian version of socialism [1]. This exposes the fabric of a normal economy to small stressors, a couple of which may hit it big and destroy entire industries. This has its brutal repercussions [2] which are not only economical, but also social, as the sum of jobs destroyed is bigger than the new ones created, at least in low innovation sectors, and which makes extremist movements grow out of the general frustration with the state of things (isn't Trump the result of "disruption" in politics too?). However, in my opinion Universal Basic Income will fix all the major problems acting effectively as a universal VC - and paradoxically a healthy one as not guided by buzzwords or credentialism, which should be the only way any subsidy work, as it frees everyone from black swan risks which are fruit of unexpected outcomes of technological advances (and a good thing per se), and enables them to work on bettering the world in an amazing way (my speculation). Until the AI comes along... Well, that's for another story. [0] https://m.signalvnoise.com/venture-capital-is-going-to-murder-medium-656cbccf4829 https://m.signalvnoise.com/venture-capital-is-going-to-murde... [1] https://medium.com/@willszal/venture-capital-as-socialism-478770b9715b https://medium.com/@willszal/venture-capital-as-socialism-47... [2] https://www.technologyreview.com/s/515926/how-technology-is-destroying-jobs/ https://www.technologyreview.com/s/515926/how-technology-is-... Edit: build an argument
- Judgmentality 9y ago
  Even though I agree with you, it would make for a much better conversation if you provided some evidence yourself instead of insisting the onus is on others to prove you wrong.
  - jxub 9y ago
    You're right, I sound like a prick even though I hadn't meant it. I'll grab some data later on to construct a more compelling case against this type of funding.
clay_the_ripper 9y ago
I have never had a good experience with instacart. I’ve ordered from them probably 10-15 times and every single time, without fail, they either forget an item or replace an item with another item that I don’t want. This makes the service unusable, because if I’m cooking dinner that night and want to order instacart, there’s a high likelyhood I’ll be missing something crucial for my recepie, meaning I’ll have to go to the store anyway. Not to mention the shady fees. The last time I used instacart, there was a box checked called “service fee”, I clicked on it to see what it was and it said “this $10 charge is optional and helps us keep running instacart”. Meanwhile the tip for your driver box is not checked. I bet a large number of people assume the service fee is the tip, and leave tip blank. Blatant tip stealing. Plus they mark up everything you buy, and obfuscate this so it’s impossible to really know how much extra instacart is skimming off the top. Amazing prime now on the other hand has never messed up an order. They always deliver on time. The prices are actually cheaper in some cases than in store. I can’t wait for instacart to go out of business.
- askafriend 9y ago
  For me, the worst grocery delivery service is still miles better than going to a store and shopping for groceries. I'm OK with missing items, I'll just get a refund and deal with it. It's still far far better than dealing with a physical grocery store. I'm sure there are millions of others like me.
  - pnathan 9y ago
    > I'm OK with missing items, I'll just get a refund and deal with it. It's still far far better than dealing with a physical grocery store. Curious. Why do you say that? I use Instacart as a timesaver, or as a way to accomplish what I can't due to other obligations.
  - fizwhiz 9y ago
    Really don't know why you're being downvoted, but I agree. I prefer protecting my time whenever I can (read: I'm lazy) and I've personally found instacart to be an invaluable service. Whether it's a late night wine delivery from BevMo, bulk shopping from Costco (I don't have a membership and almost never remember to bring bags with me to their store), or just the weekly stuff from Safeway/Wholefoods, it's really been a godsend from the POV of saving time that I can repurpose for anything else. I don't know about the millions comment, but if you're willing to pay a premium for the convenience then it's certainly worth it. I certainly feel that way.
lerie82 9y ago
I was in virginia this past year (for a year) and I bought a little car, sold it. I didn't think about groceries when I sold it, I walked to work, it was close. I found a place online that actually delivered groceries to where I was and it was instacart. I loved this service while I was there, and even in this little place in Arizona they are looking for drivers. This service was amazing, you can substitute items for other items, you track them on a Google maps widget on their site, you get texts and instant communication with your delivery person and can choose to tip after the delivery is done. Not once did the driver forget an item (multiple drivers) and one time they didn't have the item I wanted and the driver felt bad and for Christmas without notice left me a coffee cake tree on my doorstep with the item they didn't have previously. This service deserves the valuation they have and I couldn't believe it was as big as it was when I found it last year, I thought it was a rinky-dink service that turned out to be amazing.
vthallam 9y ago
As soon as Uber launches UberEverything , Instacart will be bleeding tons of money. I already left Postmates and Seamless for UberEats. Fast, predictable and more options. If Uber could get more grocery delivery services and keep the onus of packing things on the stores vs delivery boys picking things, it will be more reliable.
subpixel 9y ago
Imagine that Netflix launched as a courier service that would take your order and then go to the video store and try to get it and bring it to you. That seems kind of crazy even with the knowledge (in hindsight) that videos would later be digitized and Netflix would be in a position to move from middleman to market-maker. But I just don't see any opportunity for Instacart to get out of the middleman role. Maybe they can make a lot of money helping grocery conglomerates try to spend their way out of a technology deficit vis-a-vis Amazon. But if that were true they would they need hundreds of millions of VC dollars?
ryanmarsh 9y ago
I know these businesses are very regional. Where we are Instacart has some insane prices and Shipt is absolutely kicking their butts on service. I'm having trouble understanding the $4.2B valuation given their execution.
habosa 9y ago
As I remember, Instacart's main business was Whole Foods delivery. When Amazon bought Whole Foods they obviously lost that market, but there was some optimism presented because now suddenly every store has to compete with Amazon and would look to Instacart as a ready-made provider of this service. But I am not so sure this will work out. Instacart builds some of their fees into item prices. If you're shopping at Whole Foods you're already signaling some price insensitivity, and you likely won't notice a few nickels added to these already premium items. However if you shop at somewhere like Safeway, this may not work. The price competition is way more intense and consumers are much more sensitive to the price of essentials. Maybe the idea is that anyone who orders groceries from a hip mobile app like Instacart is someone who can afford the convenience premium? I am just not convinced that they can really ever recover from Amazon here. Plus these other chains may want to do business with Instacart today, but in the long term they'll probably invest in their own delivery services and cut out the middle man. Instacart is a pretty legit business, but $4.2B is a lot for a middleman in an industry that is synonymous with low margins.
- lobster_johnson 9y ago
  Instacart hasn't lost Whole Foods. You can still get deliveries. (Though who knows whether this will last, or whether it can compete on price with Amazon's own offerings.)
bluetidepro 9y ago
I really hope this money goes towards their customer service infrastructure, and the quality of their workers. As an Instacart Express customer (their premium offer for free delivery) since 2013, I can say the customer service has gone downhill significantly. I can elaborate some here more... - Their quality of workers have gone down. I don't know if they have just lowered the bar for who they hire, or if the workers are too focused on competing orders that they just don't care anymore. I'm not exactly sure. For example, in the app there is a setting option you (as a user) can set to explicitly request a phone call me if there is any replacements to confirm them. In the past year, I don't think any workers have followed this setting. And I understand that is maybe because Instacart has added some of that functionality in app, but that doesn't really work all the time. I have also recently had more and more Instacart workers who will make the "replacement" requests in the last 2 seconds of shopping so you have no ability to actually "approve/deny" the things they pick. I believe they do this on purpose so they don't have to do as much work trying to communicate with their user they are shopping for. It probably shaves off time they have for completing other orders. So, by this "evil" tactic I've seen them start to use more and more, you can't actually control the replacements. You just get what they assumed you may want for the replacement. This is incredibly frustrating as a user to have happen to your order. Instacart has been good at refunding me for the bad replacements, but if they would have just called (like I marked in the app), we could have resolved the issue in store, and it would be all good. I don't understand why Instacart still has this setting if no workers are going to follow it anymore. They need to get this sorted out. Either informing their workers, or forcing app users to explicitly approve/deny in app before it closes that opportunity. - Their up-sell fees have gotten outrageously greedy. It seems they are just rounding up to the highest potential possible and then charging that. They are transparent that some stores have higher prices, I understand that, but it's frustrating when certain items are way too up-priced. Meat being a perfect example. If you just want to get 1 ribeye steak, the app will say it will be $20, but then when you get the piece of meat it will still have the price label on it saying it was say $8. Instacart doesn't do any price adjustment to factor that and just charges $20, unless you contact their customer support and complain. On top of that, last time their customer support wouldn't even change it until I complained on Twitter. Then they finally took care of it. - They used to give debit/credit card refunds for mistakes. Now they just give you a credit to your next order. I absolutely HATE this practice that companies sometimes do. It's so anti-consumer. You can't call it a refund if I'm forced to use your service again to actually be redeemed. That's a credit, not a refund. I don't get why they changed to this model, other than to speculate that their poor customer service has bit them in the butt so it's easier to give the user "monopoly" money to be forced to come back to use it, rather than just giving them a true refund. I'm not sure. Those are just a few things that I've started to notice way more frequently. And I'll be 100% clear, this has all happened within the last year. I had 0 problems until the past year. I have no clue why it took such a dramatic fall. In the past year, there hasn't been a SINGLE order where I haven't had to contact customer support to fix something. And it's getting obvious that even their support is caring less and less about helping. Like making me have to go as far as get "social media justice" for them to fix their problems. It's a bad trend I've seen. I'm optimistic that they can turn it around, and hopefully this money can help with that. I will not be renewing my Instacart Express this year, that's for sure. Will probably give them a few orders to redeem themselves after that and see. If it's still poor service, they will have lost a loyal customer all because of poor quality/scaling. But I'm also just 1 user. I get everyone may have different experiences.
s73v3r_ 9y ago
So with that money, can they finally afford to pay living wages to the people who make their service possible?
veritas3241 9y ago
Surprised nobody has mentioned a different, sort-of competing model. Here in Nashville (and I assume other locations), Kroger offers ClickList[0]. Basically, order ahead of time via their website and select when you want to pick up from the store (w/o leaving your car). It doesn't have the convenience of delivery, plus you typically have to order a day in advance, but it seems like the benefits would be that a) the people doing the picking are employees of the store, b) you're unlikely to not have a deliverable order, and c) you're probably out anyways and can schedule around your pickup. Maybe this is more valuable outside of bigger cities, but I see people using it all the time around here. I haven't used it myself quite yet. [0] https://www.kroger.com/topic/clicklist https://www.kroger.com/topic/clicklist
free2rhyme214 9y ago
Instacart's biggest issue is not knowing real-time inventory. Amazon will never have this issue, because they just bought Whole Foods. Instacart, on the other hand, relies on crowdsourced shopper data to manage this. The results is basically a hit and miss experience. My guess is they hope to get this inventory data direct from the stores one day, but who knows if they will.

126 points by smaili 9y ago

Wow, so they've raised close to $1bn so far! Wonder how many of these delivery services like Doordash, Postmates, Grubhub, Caviar, Uber eats etc will survive the next economic downturn.

dalbasal 9y ago
That may not matter, necessarily. If 3 of these fail but one becomes a £10bn company, that's ok. Some investors win, others lose, it averages out to normal returns. VC is supposed to be risky.
jimmy1 9y ago
As a former restaurateur, I would like to tell you, contrary to popular opinion, during the last major economic downturn in 2008 (2009 for me since I was in a southern state, and the downturn hit us a bit later than most), spending money out to eat actually went up. The theory goes a little something like this -- people actually spend more money on themselves to cheer themselves up when life gets shittier. So folks, too depressed to cook, would go out and at least try to eat, drink, and be merry. Now how this correlates to these dining services has yet to be determined.
- jotm 9y ago
  Surprisingly, most poor people order takeaways the most around here, as well.
  - jimmy1 9y ago
    It's not surprising to me, it all ties back to the reality that it is more expensive to be poor than not. If you are poor, you most likely don't have the ability to keep a kitchen stocked with cooking essentials (spices are expensive), pots, pans, the increased water and heating cost to run a dishwasher and oven. Never mind the fact that most people living paycheck to paycheck are going from job to job and are physically exhausted at the end of the day. And that's for the people who were able to afford housing, then you have poor people stuck in shitty motels because they can't afford first month's rent and a security deposit. Those usually only have microwaves and a mini fridge. Often times, going to McDonalds is your best option. The Government also subsidizes Big Food, so that factors. Getting 4 McDoubles for 4 dollars in 5 minutes driving through the drive thru next to your house so you can get back home to your kids and see them for the couple hours you have in between jobs versus spending 30 min to an hour buying a pound of ground beef, buns, cheese, lettuce, tomatos, the energy and utilities cost and the lost opportunity cost of the time spent cooking and cleaning when you could be working, it isn't hard to see why poor people choose the fast food.
    - maxerickson 9y ago
      The energy and other utilities for 1 meal will be like $0.30. So that barely registers compared to time and ingredients.
      - jimmy1 9y ago
        Bad credit affects utility costs. Most impoverished people have bad credit. Again, being poor costs more in almost all areas of life in America. Contrary to popular belief, utilities are not a right. Utility companies have the right to refuse you if you have enough delinquent payments, can't front the deposit (if you have bad credit) or even outright refuse you (if you have terrible credit). Even on the FTC's website, their advice if you have trouble paying your utilities is basically to "budget harder"
        jotm 9y ago
        Wow, I didn't know it was that bad. Being denied utilities based on credit score... damn. Do you have prepaid meters by any chance? It's the standard option for those who fail to pay their bills on time here. With a prepaid, you load up money and it turns off your gas/electrical once the prepaid amount is exhausted. Water is exempt, no one can turn off the water at a residential address, no matter how long you haven't paid...
  - ggg9990 9y ago
    It’s because low paid work is the hardest, physically and mentally, so poor people don’t have the energy to cook, and with McDonalds available, they don’t really need to when you can get a dinner for $2.
- radiorental 9y ago
  It's call the Lipstick Effect, aka Lipstick Recession Indicator. https://www.investopedia.com/terms/l/lipstick-effect.asp https://www.investopedia.com/terms/l/lipstick-effect.asp And just as a somewhat tangential but related story to the phenomenon, British soldiers distributed lipstick tp the liberated but gravely ill women of the Bergen-Belsen concetration camp in WWII, it lifted their moral just enough in some cases to help save their lives.
  - jimmy1 9y ago
    I love this. Never knew it had a name. Thanks for showing me that. I also love all history related to WWII, so thanks for giving me Wikipedia food for 3 hours tonight.
- lazerpants 9y ago
  I'd like to posit an alternative argument. That the increase in business was more due to demographic shifts than to the "lipstick effect". Around 2007 the entire generation of millennials was finally of age to go out and spend money eating. This is the largest demographic group of Americans. Even if people 16-30 were spending less money per person eating out, the volume of individuals spending money on eating out was sufficiently high to increase business.
whoisjuan 9y ago
UberEats will likely win in the long run... On-demand is just a long-term game of leading and losing money... Uber has the distribution and the money that will allow them to lead and lose for longer than anyone else. How much money can all these companies lose before finding themselves in a dead-end? (no positive cash-flow, no more investors willing to invest, no more local market first mover advantage). People who deliver for these companies will do it for the ones that can give them more business and larger commissions. People who order from these companies will do it from the ones with the largest selection and the lowest fees... Only Uber can pull-off the economies of scale to arbitrate those two sides without running out of money.
- mathattack 9y ago
  UberEats will struggle unless they didn’t service issues. They are slaves to the whims of drivers who can cancel orders at any time.

matte_black 9y ago

Terrifying, considering this one will be one of the first companies to go the minute this roaring economy goes sour.

deleted 9y ago
[deleted]

ananab 9y ago

Gotta make easy money while you can

sctb 9y ago
We ban accounts that won't post civilly and substantively, so please read and follow the site guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html.

jedberg 9y ago

From an outsiders perspective this looks like a bad investment. But I'm an outsider, so I know I don't have all the information. I would love to get an insiders perspective on why this is a good investment. My two main concerns: 1) Amazon and Whole Foods: Are they not a concern? 2) Economic downturn: Will people still order groceries at a premium?

rabidonrails 9y ago
>>1) Amazon and Whole Foods: Are they not a concern? I think they are a concern, not necessarily to Instacart but to all of the grocery chains that need to compete with Amazon/WF. Since Instacart already has the tech/infra/domain knowledge to build this service out, Instacart's value goes shooting up.
buildawesome 9y ago
opinions: 1. instacart gives companies besides amzn/wf a logistics platform to ship out retail goods. It makes these other companies more competitive. This is why you see a company like Target acquire Shipt. 2. it won't be a premium if self-driving cars exist. it might be a waiting game for investors, just like how uber and lyft are floated right now.
cryptoz 9y ago
> 2) Economic downturn: Will people still order groceries at a premium? I'm not sure about the data and large trends for this, but here's my anecdote: Right now Instacart is the cheapest way for me to get groceries. Someone with a gun took my driver's license from me a few months ago, my bike was dismantled by thiefs, and I don't live within walking distance of a grocery store. Lyft/Uber there and back is $20. Bus there and back is $6 (but with added time and stress). Instacart is $5-6. Yes, eventually, it will be easier for me to bike there or to drive there, but not right now. Right now the cheapest way for me to get a large grocery trip done is Instacart. So maybe they could survive. Not everyone is in my position, but someone who works two jobs, doesn't have a car and lives far from the store...that could describe a lot of people in the near future.
- 9y ago

jxub 9y ago

Another valueless "disruption" being injected play money to destabilise the semblance of healthy capitalism we had on a macro level. Venture capital enables subsidies to speculative companies in hope of a small probability of profit, which destroys perfectly good small companies [0] , and acts as a libertarian version of socialism [1]. This exposes the fabric of a normal economy to small stressors, a couple of which may hit it big and destroy entire industries. This has its brutal repercussions [2] which are not only economical, but also social, as the sum of jobs destroyed is bigger than the new ones created, at least in low innovation sectors, and which makes extremist movements grow out of the general frustration with the state of things (isn't Trump the result of "disruption" in politics too?). However, in my opinion Universal Basic Income will fix all the major problems acting effectively as a universal VC - and paradoxically a healthy one as not guided by buzzwords or credentialism, which should be the only way any subsidy work, as it frees everyone from black swan risks which are fruit of unexpected outcomes of technological advances (and a good thing per se), and enables them to work on bettering the world in an amazing way (my speculation). Until the AI comes along... Well, that's for another story. [0] https://m.signalvnoise.com/venture-capital-is-going-to-murder-medium-656cbccf4829 https://m.signalvnoise.com/venture-capital-is-going-to-murde... [1] https://medium.com/@willszal/venture-capital-as-socialism-478770b9715b https://medium.com/@willszal/venture-capital-as-socialism-47... [2] https://www.technologyreview.com/s/515926/how-technology-is-destroying-jobs/ https://www.technologyreview.com/s/515926/how-technology-is-... Edit: build an argument

Judgmentality 9y ago
Even though I agree with you, it would make for a much better conversation if you provided some evidence yourself instead of insisting the onus is on others to prove you wrong.
- jxub 9y ago
  You're right, I sound like a prick even though I hadn't meant it. I'll grab some data later on to construct a more compelling case against this type of funding.

clay_the_ripper 9y ago

I have never had a good experience with instacart. I’ve ordered from them probably 10-15 times and every single time, without fail, they either forget an item or replace an item with another item that I don’t want. This makes the service unusable, because if I’m cooking dinner that night and want to order instacart, there’s a high likelyhood I’ll be missing something crucial for my recepie, meaning I’ll have to go to the store anyway. Not to mention the shady fees. The last time I used instacart, there was a box checked called “service fee”, I clicked on it to see what it was and it said “this $10 charge is optional and helps us keep running instacart”. Meanwhile the tip for your driver box is not checked. I bet a large number of people assume the service fee is the tip, and leave tip blank. Blatant tip stealing. Plus they mark up everything you buy, and obfuscate this so it’s impossible to really know how much extra instacart is skimming off the top. Amazing prime now on the other hand has never messed up an order. They always deliver on time. The prices are actually cheaper in some cases than in store. I can’t wait for instacart to go out of business.

askafriend 9y ago
For me, the worst grocery delivery service is still miles better than going to a store and shopping for groceries. I'm OK with missing items, I'll just get a refund and deal with it. It's still far far better than dealing with a physical grocery store. I'm sure there are millions of others like me.
- pnathan 9y ago
  > I'm OK with missing items, I'll just get a refund and deal with it. It's still far far better than dealing with a physical grocery store. Curious. Why do you say that? I use Instacart as a timesaver, or as a way to accomplish what I can't due to other obligations.
- fizwhiz 9y ago
  Really don't know why you're being downvoted, but I agree. I prefer protecting my time whenever I can (read: I'm lazy) and I've personally found instacart to be an invaluable service. Whether it's a late night wine delivery from BevMo, bulk shopping from Costco (I don't have a membership and almost never remember to bring bags with me to their store), or just the weekly stuff from Safeway/Wholefoods, it's really been a godsend from the POV of saving time that I can repurpose for anything else. I don't know about the millions comment, but if you're willing to pay a premium for the convenience then it's certainly worth it. I certainly feel that way.

lerie82 9y ago

I was in virginia this past year (for a year) and I bought a little car, sold it. I didn't think about groceries when I sold it, I walked to work, it was close. I found a place online that actually delivered groceries to where I was and it was instacart. I loved this service while I was there, and even in this little place in Arizona they are looking for drivers. This service was amazing, you can substitute items for other items, you track them on a Google maps widget on their site, you get texts and instant communication with your delivery person and can choose to tip after the delivery is done. Not once did the driver forget an item (multiple drivers) and one time they didn't have the item I wanted and the driver felt bad and for Christmas without notice left me a coffee cake tree on my doorstep with the item they didn't have previously. This service deserves the valuation they have and I couldn't believe it was as big as it was when I found it last year, I thought it was a rinky-dink service that turned out to be amazing.

vthallam 9y ago

As soon as Uber launches UberEverything , Instacart will be bleeding tons of money. I already left Postmates and Seamless for UberEats. Fast, predictable and more options. If Uber could get more grocery delivery services and keep the onus of packing things on the stores vs delivery boys picking things, it will be more reliable.

subpixel 9y ago

Imagine that Netflix launched as a courier service that would take your order and then go to the video store and try to get it and bring it to you. That seems kind of crazy even with the knowledge (in hindsight) that videos would later be digitized and Netflix would be in a position to move from middleman to market-maker. But I just don't see any opportunity for Instacart to get out of the middleman role. Maybe they can make a lot of money helping grocery conglomerates try to spend their way out of a technology deficit vis-a-vis Amazon. But if that were true they would they need hundreds of millions of VC dollars?

ryanmarsh 9y ago

I know these businesses are very regional. Where we are Instacart has some insane prices and Shipt is absolutely kicking their butts on service. I'm having trouble understanding the $4.2B valuation given their execution.

habosa 9y ago

As I remember, Instacart's main business was Whole Foods delivery. When Amazon bought Whole Foods they obviously lost that market, but there was some optimism presented because now suddenly every store has to compete with Amazon and would look to Instacart as a ready-made provider of this service. But I am not so sure this will work out. Instacart builds some of their fees into item prices. If you're shopping at Whole Foods you're already signaling some price insensitivity, and you likely won't notice a few nickels added to these already premium items. However if you shop at somewhere like Safeway, this may not work. The price competition is way more intense and consumers are much more sensitive to the price of essentials. Maybe the idea is that anyone who orders groceries from a hip mobile app like Instacart is someone who can afford the convenience premium? I am just not convinced that they can really ever recover from Amazon here. Plus these other chains may want to do business with Instacart today, but in the long term they'll probably invest in their own delivery services and cut out the middle man. Instacart is a pretty legit business, but $4.2B is a lot for a middleman in an industry that is synonymous with low margins.

lobster_johnson 9y ago
Instacart hasn't lost Whole Foods. You can still get deliveries. (Though who knows whether this will last, or whether it can compete on price with Amazon's own offerings.)

bluetidepro 9y ago

I really hope this money goes towards their customer service infrastructure, and the quality of their workers. As an Instacart Express customer (their premium offer for free delivery) since 2013, I can say the customer service has gone downhill significantly. I can elaborate some here more... - Their quality of workers have gone down. I don't know if they have just lowered the bar for who they hire, or if the workers are too focused on competing orders that they just don't care anymore. I'm not exactly sure. For example, in the app there is a setting option you (as a user) can set to explicitly request a phone call me if there is any replacements to confirm them. In the past year, I don't think any workers have followed this setting. And I understand that is maybe because Instacart has added some of that functionality in app, but that doesn't really work all the time. I have also recently had more and more Instacart workers who will make the "replacement" requests in the last 2 seconds of shopping so you have no ability to actually "approve/deny" the things they pick. I believe they do this on purpose so they don't have to do as much work trying to communicate with their user they are shopping for. It probably shaves off time they have for completing other orders. So, by this "evil" tactic I've seen them start to use more and more, you can't actually control the replacements. You just get what they assumed you may want for the replacement. This is incredibly frustrating as a user to have happen to your order. Instacart has been good at refunding me for the bad replacements, but if they would have just called (like I marked in the app), we could have resolved the issue in store, and it would be all good. I don't understand why Instacart still has this setting if no workers are going to follow it anymore. They need to get this sorted out. Either informing their workers, or forcing app users to explicitly approve/deny in app before it closes that opportunity. - Their up-sell fees have gotten outrageously greedy. It seems they are just rounding up to the highest potential possible and then charging that. They are transparent that some stores have higher prices, I understand that, but it's frustrating when certain items are way too up-priced. Meat being a perfect example. If you just want to get 1 ribeye steak, the app will say it will be $20, but then when you get the piece of meat it will still have the price label on it saying it was say $8. Instacart doesn't do any price adjustment to factor that and just charges $20, unless you contact their customer support and complain. On top of that, last time their customer support wouldn't even change it until I complained on Twitter. Then they finally took care of it. - They used to give debit/credit card refunds for mistakes. Now they just give you a credit to your next order. I absolutely HATE this practice that companies sometimes do. It's so anti-consumer. You can't call it a refund if I'm forced to use your service again to actually be redeemed. That's a credit, not a refund. I don't get why they changed to this model, other than to speculate that their poor customer service has bit them in the butt so it's easier to give the user "monopoly" money to be forced to come back to use it, rather than just giving them a true refund. I'm not sure. Those are just a few things that I've started to notice way more frequently. And I'll be 100% clear, this has all happened within the last year. I had 0 problems until the past year. I have no clue why it took such a dramatic fall. In the past year, there hasn't been a SINGLE order where I haven't had to contact customer support to fix something. And it's getting obvious that even their support is caring less and less about helping. Like making me have to go as far as get "social media justice" for them to fix their problems. It's a bad trend I've seen. I'm optimistic that they can turn it around, and hopefully this money can help with that. I will not be renewing my Instacart Express this year, that's for sure. Will probably give them a few orders to redeem themselves after that and see. If it's still poor service, they will have lost a loyal customer all because of poor quality/scaling. But I'm also just 1 user. I get everyone may have different experiences.

s73v3r_ 9y ago

So with that money, can they finally afford to pay living wages to the people who make their service possible?

veritas3241 9y ago

Surprised nobody has mentioned a different, sort-of competing model. Here in Nashville (and I assume other locations), Kroger offers ClickList[0]. Basically, order ahead of time via their website and select when you want to pick up from the store (w/o leaving your car). It doesn't have the convenience of delivery, plus you typically have to order a day in advance, but it seems like the benefits would be that a) the people doing the picking are employees of the store, b) you're unlikely to not have a deliverable order, and c) you're probably out anyways and can schedule around your pickup. Maybe this is more valuable outside of bigger cities, but I see people using it all the time around here. I haven't used it myself quite yet. [0] https://www.kroger.com/topic/clicklist https://www.kroger.com/topic/clicklist

free2rhyme214 9y ago

Instacart's biggest issue is not knowing real-time inventory. Amazon will never have this issue, because they just bought Whole Foods. Instacart, on the other hand, relies on crowdsourced shopper data to manage this. The results is basically a hit and miss experience. My guess is they hope to get this inventory data direct from the stores one day, but who knows if they will.