Grocery delivery startups have brought in more investor dollars than companies that deliver prepared meals, a reversal from previous years, according to research firm CB Insights.
(Image courtesy: Instacart)
Whole Foods Invests in Online Food Retailer Instacart
As more Whole Foods customers choose to avoid the store and get groceries delivered to their homes through Instacart, the high-end supermarket chain is taking a stake in the four-year-old startup.
Instacart Inc. authorized the sale of new equity earlier this year, letting Whole Foods Market Inc. buy shares in the startup in conjunction with an expanded partnership, said people familiar with the transaction, who asked not to be identified because the details are private. Analysis by private stock market operator Equidate, based on a regulatory filing, pegged the total equity authorization at about $36 million.
Before the Whole Foods investment, Instacart had raised more than $270 million, according to data compiled by Bloomberg. The San Francisco startup and its peers have benefited from a shift in an overcrowded food delivery market this year. Grocery delivery startups have brought in more investor dollars than companies that deliver prepared meals, a reversal from previous years, according to research firm CB Insights.
Whole Foods first teamed up with Instacart on a delivery program in 2014 and has since expanded to more than 25 markets across the U.S. It allows customers to order food and other products directly from the Whole Foods website and have them delivered. In March, the two companies said they would increase the number of Whole Foods stores with "embedded Instacart shoppers" by up to 50 percent this year.
Grocery delivery is a key initiative as Whole Foods tries to claw its way out of its biggest sales slump since 2009. As conventional grocers have expanded their organic offerings and pushed prices down, Whole Foods has suffered under the weight of its reputation for being overpriced.
Instacart Inc. authorized the sale of new equity earlier this year, letting Whole Foods Market Inc. buy shares in the startup in conjunction with an expanded partnership, said people familiar with the transaction, who asked not to be identified because the details are private. Analysis by private stock market operator Equidate, based on a regulatory filing, pegged the total equity authorization at about $36 million.
Before the Whole Foods investment, Instacart had raised more than $270 million, according to data compiled by Bloomberg. The San Francisco startup and its peers have benefited from a shift in an overcrowded food delivery market this year. Grocery delivery startups have brought in more investor dollars than companies that deliver prepared meals, a reversal from previous years, according to research firm CB Insights.
Whole Foods first teamed up with Instacart on a delivery program in 2014 and has since expanded to more than 25 markets across the U.S. It allows customers to order food and other products directly from the Whole Foods website and have them delivered. In March, the two companies said they would increase the number of Whole Foods stores with "embedded Instacart shoppers" by up to 50 percent this year.
Grocery delivery is a key initiative as Whole Foods tries to claw its way out of its biggest sales slump since 2009. As conventional grocers have expanded their organic offerings and pushed prices down, Whole Foods has suffered under the weight of its reputation for being overpriced.
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