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Instacart company logo
Corporation
MOBILE & TELECOMMUNICATIONS | Mobile Commerce / Food & Grocery
instacart.com

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Founded Year

2012

Stage

Series I | Alive

Total Raised

$2.686B

Valuation

$0000 

Last Raised

$265M | 7 mos ago

Revenue

$0000 

About Instacart

Instacart is a mobile app that allows users to shop for groceries directly from a phone. Instacart can deliver groceries from multiple local stores within an hour and is often less expensive for consumers than a personal, time-consuming trip to the grocery store. Instacart utilizes a crowdsourced model of Personal Shoppers who provide their own transportation and smartphones to shop and deliver groceries to customers.

Instacart Headquarter Location

50 Beale Street Suite 600

San Francisco, California, 94105,

United States

910-817-2278

Latest Instacart News

Why Non-Advertising Businesses Are Going Into Ads

Sep 22, 2021

One of the most important trends in advertising right now is the rapid growth of ad businesses stood up by non-advertising companies. The OG of this category is Amazon. The online retailer has shown ads can be a high-margin addition to the bottom line, boosting profit without heavy upfront investments for any business with valuable data and real estate for potential ads in an app or site. It came as no shock when Instacart, the online grocery delivery platform and an Amazon Fresh competitor, launched a self-service ad platform last year. Or this year when buy now pay later (BNPL) services Klarna and Afterpay, which offer installment-style payments for ecommerce, started testing in-house ad networks powered by their financial data. Uber is also investing heavily in its ad business, including the recent hire of Mark Grether from Amazon Advertising. Another thing each of those companies has in common: They’re unprofitable. Advertising offers a bridge to profitability, since ad revenue can be earned with relatively little hiring and without acquiring new users. Here are some of the businesses and categories that embraced ad revenue, and how they approach advertising. The grocery game Instacart was a fast follower of Amazon into the ad business. That’s hardly a surprise, considering it works with many of the same retail trade marketers bringing their promotional budgets online, rather than coupons campaign and in-store displays. Instacart also poached Amazon’s ad tech leader, Seth Dallaire, as its CRO. Instacart’s financial info isn’t public, but the company lost more than $300 million in 2019, and had its first profitable month last April, when so many new customers tried online grocery during quarantine, The Information reported last year. But even with the unforeseen surge in orders, Instacart turned only a $10 million monthly profit; and since it needed to hire thousands more delivery workers to meet demand, that profit number wasn’t sustainable without further investment. Instacart raised more than $2.7 billion from venture capital investors, but it’s an extension of retail grocery, known for high costs and low margins. Products often have a profit margin of only a few percent points. Unlike the easy scalability of a software platform, Instacart must hire gig workers to match sales growth. To grow sales, Instacart must either convert new customers or replace more and more of their store visits. But user acquisition and retention are expensive propositions right now. Instacart isn’t the only delivery service pivoting to ads. GoPuff, a one-hour delivery service for convenience store goods, launched an ad platform this year. Ads on the move Uber is a prime example of a company with high potential earnings from advertising, but also immense risk. The Uber app is among a select group with near universal user opt-ins for location tracking. The company knows if it dropped someone off at a mall, movie theater or hotel, say, which could be a powerful targeting and attribution engine (pardon the car pun). Uber’s ad business currently is narrow, but significant. CEO Dara Khosrowshahi said the company is on a run rate to earn $300 million in ad revenue this year. That’s real money (BuzzFeed earned $320 million in 2020, according to its pre-IPO filing, for comparison’s sake), but it’s primarily from the food delivery app Postmates and the launch of Uber Eats, since restaurants pay for placement in the apps. Uber’s other ad supply comes from physical signage drivers can place on their vehicles. And last month it began testing display ads in its core ride-hailing app for the first time. But building an ad business is risky as well, said Forrester VP and research director Mike Proulx. “Non-traditional platforms that are enabling ad networks must do no harm to their user experience. Apps like Uber and Instacart have a very specific use case in people’s lives that better not be interrupted by standard ads,” he said. Waze, the Google-owned mapping app, has also experimented this year with in-app advertising opportunities that don’t trip users who are accustomed to an ad-free experience. A Nissan campaign gave users a chanced to change their in-app car icon to a Pathfinder, as well as integrated marketing content if people drove by certain locations (off-road terrain and scenic drives). That’s one route for Uber. Though with Grether, former COO of Xaxis and CEO of Sizmek, in charge of the ad business, Uber could plan to expand into programmatic and data-driven advertising. “Brands will always chase audiences to wherever they are most receptive to their messages. However, just because a platform has a well scaled and highly engaged user base, doesn’t mean its users will welcome a sudden onslaught of ads,” Proulx said. The BNPL craze Another category of digital-first brands that have decided to cross the Rubicon into advertising are BNPLs. The temptation is clear enough. With purchase histories and credit information, BNPLs are well-placed to sort and target users based on whether they’re luxury goods shoppers, have high disposable incomes or are, say, filling out a new house with furniture. They can also attribute based on purchases, similar to how Amazon or Instacart close the loop and claim credit on sales. BNPL companies acquire users at a loss, and must make up those earnings over time. And they face a liquidity crunch, because they loan out large sums that are recouped in small payments. Affirm and Afterpay, two public BNPL companies, lost between $150 million and $250 million in Q2 of this year alone. Advertising is the liquidity solution. Afterpay’s ad product will begin with an affiliate model, co-CEO Nick Molnar told investors on an earnings report last month. In other words, retailers will be able to piggyback on Afterpay’s content and user messaging to offer products. “There will certainly be the ability to broaden that ad platform over time reflect a more traditional platform,” Molnar said. The affiliate model is less invasive; As with Waze’s integrated marketing, Afterpay’s affiliate links aren’t familiar IAB-standard ad units that might repel users. Afterpay’s ad platform is also a boon for its retail and brand partner business. Afterpay’s customers are people making purchases, but retailers and merchants must agree to bring the BNPL service on as a payment option within their online shopping system. Molnar told investors that advertising, and particularly the ability to re-engage users who have made a purchase, is an important feature for attracting and retaining retailers. Ads, ads, everywhere From Uber to Instacart to BNPL, these new companies and categories are hardly the only examples of ads showing up in new places. Mobile banking customers may be surprised to discover promotions popping up in their finance apps, powered by Cardlytics. Not to mention Walgreen’s refrigerators and freezers displaying ads on screens. Or, heaven forbid, the Tesla satellite serving ads to empty space. Tesla has turned a profit consistently for the past two years. And its DOOH billboard in near-Earth orbit is a joke, not a money-driver. But as with jokes, it’s funny because it’s partially true. If Tesla ever slips below profitability, or faces a financial sustainability crunch. Will it cut staff and trim operations? Perhaps. More likely, a cash-strapped, data-rich company starts an ad business. Enjoying this content? Sign up to be an AdExchanger Member today and get unlimited access to articles like this, plus proprietary data and research, conference discounts, on-demand access to event content, and more!

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Expert Collections containing Instacart

Expert Collections are analyst-curated lists that highlight the companies you need to know in the most important technology spaces.

Instacart is included in 6 Expert Collections, including CPG & Retail Innovation.

C

CPG & Retail Innovation

255 items

AI, proximity marketing, product discovery, and more for CPG brands.

S

Smart Money VCs (2017-2019)

6,297 items

We crunched the data to identify the 24 VC firms with the best combination of portfolio valuations and investment outcomes.

S

Supply Chain & Logistics Tech

4,161 items

Companies offering technology-driven solutions that serve the supply chain & logistics space (e.g. shipping, inventory mgmt, last mile, trucking).

U

Unicorns- Billion Dollar Startups

832 items

G

Grocery Retail Tech

300 items

Startups providing B2B solutions to grocery businesses to improve their store and omni-channel performance. Includes customer analytics platforms, in-store robots, predictive inventory management systems, online enablement for grocers and consumables retailers, and more.

O

On-Demand

1,283 items

Instacart Web Traffic

Rank
Page Views per User (PVPU)
Page Views per Million (PVPM)
Reach per Million (RPM)
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Instacart Rank

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