On-demand grocery startup Instacart is fielding term sheets for a big new round of funding, according to sources. We’ve heard the new financing could be led by a non-VC investor, and according to one source it would value the company at up to $400 million.
Instacart provides same-day delivery of groceries from a number of different local stores in various cities around the country. Customers place orders either through the company’s website or its mobile apps, and have groceries brought to their homes in a matter of hours.
It’s delivers for national chains like Whole Foods and Costco, while also teaming up with smaller regional stores like Rainbow Grocery in San Francisco or Dominick’s in Chicago to make their goods available to customers.
The company currently operates in eight cities — San Francisco, Boston, Chicago, New York City, Los Angeles, Philadelphia, San Jose, and Washington DC. But it plans to continue expanding aggressively over the next year.
At the same time that Instacart has been adding new markets, revenue has exploded. In the two months prior to its New York City launch, for instance, its sales were up 2.4x. In an effort to accelerate that growth, the company is considering raising another big round of funding less than a year after it closed its Series A.
Last July it brought on $8.5 million in funding led by Sequoia Capital, with existing investors Khosla Ventures, Canaan Partners, SV Angel, and Paul Buchheit also participating. To date, Instacart has raised a total of about $11 million.
As Instacart prepares for aggressive expansion, its next round is expected to be much larger and richer in valuation. According to one source, the company has fielded term sheets from non-venture capital investors like hedge funds or private equity firms.
Typically, those types of firms don’t invest until the Series C or Series D stage, but a few — like Tiger Global, which recently invested in Kitchensurfing, or Coatue Management, which put money into HotelTonight — have shown an appetite for earlier-stage investments in companies with very strong traction.
Based on what Instacart has shown so far in its first four markets, it probably qualifies.
Not surprisingly, Instacart declined to comment for this story.