Delivery

Instacart Will No Longer Work With Whole Foods

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Instacart, the grocery delivery service, will begin the process of separating from long-time partner Whole Foods, according to a report from Bloomberg.

The two companies have been heavily intertwined since 2014, when Instacart was only two years old. Instacart made the announcement on Dec. 13, saying Instacart customers will soon no longer be able to order from Amazon-owned Whole Foods.

The company has about 1,415 part-time workers picking and packing groceries in Whole Foods stores. Those workers will be given the option to move to other stores or leave their jobs, Instacart said, with either severance or transfer pay.

The separation between the companies will take about two months, because they were both so interconnected. Instacart placed in-store shoppers at Whole Foods and had special checkout lanes for the company’s orders. Also, in 2016, the companies signed an exclusive agreement to make Instacart the only delivery service for many Whole Foods.

Everything changed in June of 2017, when Amazon announced it was buying Whole Foods for $13.7 billion. Amazon delivery workers started to appear in Whole Foods locations, working through the Amazon app and sometimes taking over Instacart areas.

Instacart is a large company with more than 70,000 workers, a mix of part-time employees and contractors. Instacart said it will move its workers into other stores, like Publix and Costco.

Last month, Instacart raised $271 million, bringing its most recent round of funding to $871 million. The additional funding came from investors including U.S. hedge fund Tiger Global Management and existing investors Coatue Management and Valiant Capital.

The company has raised $1.87 billion in total and has a $7.87 billion valuation.

Also in November, Instacart announced a national expansion of its Instacart Pickup service, which lets customers order online and pick up the groceries at retailers.

“We want to make grocery shopping effortless by helping our customers get the groceries they need from the retailers they love. Our customers want choice, and we’re excited to now offer the pickup option they’ve been asking for,” said Nilam Ganenthiran, chief business officer at Instacart, at the time.

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