Getting into the food delivery startup business became trendy in 2014, and it looks like the trend is going to continue this year.
Rounding up 2014 in the food delivery news was Instacart, the market grocery delivery service that announced it recently raised $220 million. Following that fundraising announcement, the company is said to valued at $2 billion. That's a big jump for this not-so-little startup.
"Just six months ago, Instacart was valued at about $400 million in a $44 million investment round led by venture capital firm Andreessen Horowitz. But the San Francisco-based startup has grown rapidly this year — 2014 revenue will be north of $100 million, or 10 times more than it was in 2013," Recode reported, citing statistics from CEO Apoorva Mehta. Mehta has also said Instacart plans to expand into categories beyond groceries in 2015. Currently, the company lets customers order groceries online from local stores and have them delivered on the same day.
The food delivery space is getting crowded, but that hasn't stopped more startups from joining and more acquisitions from larger companies wanting their names in the space. Investors want in, as proven by Instacart's recent fundraising success, which means the battle to win out in this industry is getting bigger.
"Instacart is also capitalizing on concerns among big grocery chains about Amazon expanding its grocery delivery business, and they are taking advantage of surging investor interest in the category. The size of the raise signals that Instacart is intent on building a standalone business rather than selling to a big company such as Amazon or Google," Recode reported.
Who's going to be next in the food delivery space?