Instacart Founder Apoorva Mehta Becomes A Billionaire After New Funding Round
Instacart’s 33 year old founder and CEO is now a billionaire. Apoorva Mehta, who started the grocery delivery firm in 2012, has seen demand for his company’s services skyrocket in the wake of the coronavirus pandemic.
The San Francisco-based unicorn announced on June 11 that it had raised $225 million in a new funding round, catapulting its valuation from $7.9 billion to $13.7 billion. Forbes estimates that Mehta owns a 10% stake, making him the newest member of the three comma club with a net worth of $1.2 billion (Forbes applies a 10% discount to the valuation of all private companies). A spokesperson for Instacart had no comment on Forbes’ estimate.
Instacart, a booming on-demand delivery business, allows customers to select groceries online. Shoppers then pack and deliver the orders to a customer’s home. Demand for the service, which is available to more than 85% of U.S. households and 70% of Canadian households, has surged under the pandemic as millions of people began sheltering in place. Order volume has gone up by as much as 500% in the past 12 months, and the average customer spent up to 35% more per order, according to Instacart.
The firm has hired 300,000 new shoppers since March and announced plans in April to hire 250,000 more to get back to offering one-hour and same-day deliveries. “We have ambitious plans for the future and this new investment enables us to deepen our support for our shoppers and partners, further fund strategic initiatives such as our advertising and enterprise businesses, and continue to deliver exceptional experiences for customers.” Mehta said in a press release announcing the new funding round. “This pandemic has fundamentally reshaped the way people think about grocery and ecommerce, and we're proud to have Instacart continue to play an important role in people's lives now and long after this crisis subsides.”
Born in India and raised in Canada, Mehta studied engineering at the University of Waterloo and worked as a design engineer at Blackberry and Qualcomm. He then landed at Amazon, where he helped develop the ecommerce giant’s fulfillment system as a supply chain engineer. But after a couple years, Mehta was looking for a new challenge. In 2010 he quit his job, moved from Seattle to San Francisco, and started trying his hand at entrepreneurship.
In the next 12 months, Mehta came up with ideas for around 20 products— which included groupon for food and a social network for lawyers — but none clicked. “The reason to start a company should never be to start a company. The reason to start a company should be to solve a problem that you truly, truly care about,” Mehta said at a Y Combinator talk in 2014.
The pain of grocery shopping was a problem that Mehta truly cared about. Though most products could be purchased online by 2012, grocery shopping hadn’t changed in decades. Mehta started coding an app that became Instacart. “I promised myself that I would not go to the grocery store until the product was ready,” Mehta said at the Y Combinator talk.
He became Instacart’s first customer and shopper, ordering groceries on the app and then picking up and delivering it to himself. He snagged an investment from Y Combinator in 2012 — after he used the app to send a six pack of beer to a partner at the incubator — then made Forbes' 30 Under 30 list a year later. In the early days, orders often came in without a shopper available, so Mehta, who did not own a car, made the deliveries himself using Uber rides.
Instacart has since expanded from San Francisco to more than 5,500 cities and 30,000 stores in North America, with partners like Albertsons, Publix, Kroger and Sam’s Club. It added pickup services in 2019, allowing shoppers to drop by brick and mortar stores and pick up pre-ordered, packed groceries. The company also launched a prescription delivery service in April, which delivers medications from nearly 200 Costco pharmacies, with plans to expand the service to all 500 Costco locations. Altogether, including the latest round, Instacart has raised nearly $2.2 billion in funding from dozens of investors including venture capital firms Andreessen Horowitz, Sequoia Capital and Kleiner Perkins.
Source: https://www.forbes.com/sites/jenniferwang/2020/06/17/instacart-founder-apoorva-mehta-becomes-a-billionaire/#bc0a9177e02e
