Instacart, our favorite grocery delivery company, joins the ranks of the unicorns, with a $220 million dollar raise on a $2 billion dollar valuation. According to Re/code, this comes just six months after Instacart raised $44 million at a valuation of about $400 million in a round led by Andreessen Horowitz. It has now raised a total of about $275 million since it started in 2012 and its other investors include Sequoia Capital, Khosla Ventures, Canaan Partners, Y Combinator President Sam Altman and Box CEO Aaron Levie.
The Wall Street Journal reports that there have now been more than 40 start ups that raised money worldwide at a valuation of $1 billion or more, double the number at the start of the year. Adjusted for inflation, there are now 70 of these so-called $1 billion unicorns, about twice as many as there were at the top of the tech bubble in 1999 and 2000.
As I have often noted in this Blog, the hundreds of local delivery companies are ripe for consolidation, as any good supply chain guy can tell you that supply chain is all about scale and greater scale means lower costs as one can better optimize routing, warehouse space and planning activities.
Perhaps not just yet, however. We need to go through a shakeout period where the weak fall and the strong then get acquired. This would be a normal pattern for either strategic or PE acquirers–wait and see who wins and loses in a new space, them sweep in and pick up the winners.
We'll see if anyone like FedEx or UPS gets antsy and goes after some of these guys earlier. They did make some interesting acquisitions in 2014–Bongo and iparcel, in particular.
Check out some interesting statistics on the food delivery world from CB Insights.
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