(Bloomberg) -- Grocery delivery giant Instacart announced a new funding round on Tuesday, lifting its valuation to $39 billion and making the company one of the most valuable startups in the world.
Buoyed by a surge in demand for deliveries during the pandemic, the company raised $265 million from investors including Andreessen Horowitz, Sequoia Capital and D1 Capital Partners, as well as Fidelity Management & Research Co. and T. Rowe Price Associates Inc. The startup had been valued at $17.7 billion during its most recent funding round, which was less than five months ago.
With its new valuation, Instacart leapfrogs Stripe Inc. to become the second-most-valuable startup in the U.S., according to CBInsights data. No. 1 is Elon Musk's Space Exploration Technologies Corp.
Instacart is the largest grocery delivery company in the U.S., according to research from Second Measure, controlling 46% of market share as of last summer. But the company, founded in 2012, encountered challenges as well as massive demand during the pandemic. The sudden growth forced Instacart to rethink its business model, and the startup cut 1,900 jobs early this year, including its only union roles.
“This past year ushered in a new normal, changing the way people shop for groceries and goods,” Instacart Chief Financial Officer Nick Giovanni said in a statement, adding that the U.S. grocery business is “still in the early stages of its digital transformation.”
With the new funding, Instacart plans to increase its corporate headcount by 50% this year, and expand projects including advertising, the company said. Instacart said it’s currently available in more than 85% of U.S. households and over 70% of those in Canada, and has partnerships with more than 45,000 stores.
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