The pandemic changed a lot of things. From the way we work to the way we interact with each other, everything saw a huge shift when the whole world had to lock themselves in their homes for months and months on end. But, if there’s one industry that experienced huge growth during this time, it’s e-commerce and online shopping. In fact, global eCommerce sales rose to $26.7 trillion in 2020, making up 19% of all retail sales (up from 16% in 2019). Instacart is one of these very successful platforms that helped the US and Canadian economies shift to online shopping on a massive scale during this global crisis. So, how did the pandemic supercharge Instacart’s growth? I’ve outlined it below but for the TL;DR check out this short video.Instacart’s BeginningsInstacart is an online platform that allows you to shop for your groceries online. It was popular even before the pandemic because of its unique business model that allows you to shop from your local grocery stores and have things delivered to your doorstep in a timeframe of as little as two hours - which is why people found the platform so easy and convenient to use. Instacart was founded in 2012 by Apoorva Mehta, a former Amazon.com employee, and his friends Max Mullen and Brandon Leonardo. Apoorva Mehta had tried and failed to launch 20 other startups before Instacart. These startups included specialized social networks and games - But sadly, none of them ever took off. Mehta came up with the idea of this online grocery delivery platform and submitted it to the Y combinator - which is where he raised enough funds to launch it. Mehta coded the earliest version of the app himself and became the platform’s first-ever customer as well. In 2015, Instacart became functional in San Francisco with around 200 employees.Growth Ever since Instacart arrived on the scene, the company has been doing pretty well and the platform was already on its way to become a ‘go-to’ service for American and Canadian consumers. But, the covid-19 pandemic really helped push things along. Why? Because their business model was perfectly suited for a time when everyone had to stay home to avoid spreading or catching the virus. Instacart’s revenue generation slowly saw a rise, increasing from $525 million in 2018 to $735 million in 2019. But, when the pandemic shut down the whole world, Instacart reportedly generated $1.5 billion in revenue in 2020, with $35 billion worth of sales. At the same time, the company saw an apparent rise in their personal shoppers. Because when people started losing their jobs, they saw Instacart as a great job opportunity as well as a quick way to make money. The platform added around 300,000 new shoppers in only the first half of 2020, and this number is only expected to increase.The platform was reportedly recovering from a $300 million loss in 2019 when the pandemic struck, and the company made a profit of $10 million for the first time in April. And by October, Instacart had become the third most popular online grocery store in the US - right next to Walmart and Amazon. Currently, the company has over 500 retail partners, including names like 7-Eleven and even Sephora, and it delivers from around 8000 store locations all over the USA and Canada.Market ShareDuring the pandemic, Instacart’s overall share in the e-commerce market increased from only 8.9 percent to around 17.2 percent at the start of June 2020 - which once seemed like an impossible feat to achieve for a company that was as small as Instacart before the pandemic. Before the pandemic, companies like Whole Foods and venture firms like D1 Capital had expressed their confidence in the platform through funding rounds. However, the company experienced a brief break in 2019, where they received little to no funding. But of course, that changed in 2020 when they started receiving millions of dollars in yet another funding round. Instacart has raised $2.7 b in total funding across 10 funding rounds for a $39 billion valuation - most of which is due to their growth during the pandemic and the latest round of funding where the company managed to raise $265 million from a series of venture firms. Advertising SalesThe company is also aiming Walmart and Amazon in the advertising sphere, courting advertisers and their budgets with valuable and unique granular shopping data such as how much someone spends on groceries and what products they buy, with the goal of reaching $1 billion in ad sales by 2022 compared to the $300 million it generated last year. To achieve this goal, they’ve hired top industry talent, including ex-Facebook exec Carolyn Everson, as their new president to set this digital transformation into motion while also increasing the diversity of females in leadership positions. As far as the future goes, Instacart will have to work on sustaining its customer base even when the lockdowns have been lifted. With 89% of users seeing Instacart as an essential service and 86% likely to keep using Instacart in the future, Instacart has the potential to continue growing in the coming years. However, the company has to make sure that they maintain true to their core values—the speed of delivery and good customer service. Considering the fact that the company is going public very soon, the future for Instacart looks promising. see hubwealthy.com/wealthy
0 comments:
Post a Comment