Instacart said it had raised $225 million in a new funding round, valuing it at $13.7 billion, as the grocery delivery company cashes in on a surge in online shopping due to the COVID-19 pandemic.
The new financing round was led by venture capitalist firms DST Global and General Catalyst, while existing investor D1 Capital Partners also participated, the San Francisco-based company said.
Instacart was valued at $7.87 billion in its last funding round in November 2018, when it raised $871 million. The company now has nearly $1 billion in cash on its balance sheet.
Surge In Order Volumes
Instacart's order volumes have surged as much as 500% over the last few months as consumers, hesitant to travel to supermarkets amid the health crisis, take to their phones to get groceries, alcohol and prescriptions drugs delivered to their doorsteps.
Online sales at Target Corp and Walmart Inc have also ballooned, leading the retailers to pour billions into expanding their own delivery services.
But, grocery chains such as Kroger and Costco Wholesale Corp have outsourced their delivery operations to Instacart, the brainchild of a former Amazon.com Inc supply chain engineer.
IPO Still On The Horizon
Instacart also said an initial public offering is still on the horizon without providing further details.
Proceeds will be used to expand its advertising unit and the arm of the business that develops shopping apps for grocers such as Wegmans, the company said.
It added that part of the funds would be used to invest in health and safety measures for its workers. The company has hired about 300,000 new workers since March.