Instacart is acquiring catering software company FoodStorm

On-demand grocery delivery platform Instacart announced this morning that it’s acquiring FoodStorm, a SaaS order management system (OMS) that powers end-to-end order-ahead and catering for grocery retailers. The companies have not disclosed the financial details of the deal, but as part of the acquisition, Instacart will integrate FoodStorm’s technology into its suite of enterprise grocery e-commerce solutions.

FoodStorm has developed a SaaS offering that covers multi-channel ordering, order management, payment and fulfillment. Its technology also integrates with several third-party systems, including point-of-sale systems (POS). The technology also offers CRM capabilities that help grocers collect feedback and leverage promotional features.

“Our goal is to help our retail partners increase their sales and ensure more of their customers’ everyday meals come from the grocery store. That’s why we’re excited to welcome the talented FoodStorm team to Instacart and integrate their end-to-end, order-ahead and catering platform into Instacart’s leading enterprise offering,” said Instacart’s chief technology officer, Mark Schaaf, in a statement.

FoodStorm, which was founded 14 years ago, has formed partnerships with several of Instacart’s existing retail partners, including Bi-Rite Market, Mollie Stone’s Markets, Uncle Giuseppe’s and Roche Brothers. Instacart plans to make FoodStorm’s technology available to more retailers.

Instacart states that this new enterprise solution helps retailers bring even more of their inventory online and enhance their e-commerce capabilities while meeting the needs of customers. As for customers, Instacart says the technology unlocks a more affordable alternative to restaurant delivery.

“Grocery is an incredibly complex retail category, making the need for enterprise-grade solutions like FoodStorm and Instacart critical to the long-term success of the industry we all rely on to put food on our tables. We’re excited about this next chapter as we join the Instacart team and create new ways for retailers to serve the ever-changing needs of their businesses and customers,” said FoodStorm CEO Rob Hill in a statement.

Instacart notes that order-ahead technology solutions provide grocery retailers with a significant growth opportunity. For instance, Instacart customers who purchase prepared foods and catering items like hot and cold side dishes, cakes and sushi from the grocery store have significantly larger baskets and shop more frequently than customers who don’t. As for retailers, Instacart outlines that order-ahead items and prepared foods are also typically more profitable than traditional groceries like produce and package goods.

Earlier this year, Instacart raised a $265 million funding round from existing investors, including Andreessen Horowitz, Sequoia Capital, D1 Capital Partners and others. The funding pushed the company’s valuation to $39 billion. Instacart also recently debuted a faster delivery service, “Priority Delivery,” in select markets in the U.S. and Canada with the aim of attracting customers who would have otherwise quickly run to the store for their smaller orders or more urgent needs.