
Instacart (YC S12) Scores $220M Investment - brianchu
http://recode.net/2014/12/30/grocery-delivery-startup-instacart-scores-220-million-investment/
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abuehrle
This company does the little things right, and people notice. I think faster
internet + smartphones are necessary but not sufficient in explaining
Instacart's success.

I live in a place with an entrance not visible from the street. The first time
I ordered, I directed the shopper over the phone. Every subsequent shopper has
found the entrance without a problem. I assume the shoppers share accurate
notes. Literally every other delivery I get requires a phone call and
directions. These little things make a huge difference, and are where similar
companies with the same potential technology fall short.

Congrats to the team. Well deserved.

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xasos
Congrats to the Instacart team! I love what they are doing. Their app has a
great user interface and the service is fast and easy to use.

It's definitely interesting to see that the world is finally ready for
something like this, because Webvan (I know it's brought up a lot) didn't do
so hot back in the day. We obviously have the technology now that we lacked 10
years ago to make something like this a major success.

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carbocation
Is the difference technological or cultural? In other words, what different
technology do we have now that would have enabled Webvan to succeed? To me it
seems that the most marked difference is the consumer culture and comfort with
online buying.

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CPLX
Let's not forget the most simple and obvious answer: browsing the internet was
_slow_ back in the day. When I was living in NYC during the Kozmo/Urbanfetch
era it would be 20-30 seconds or so to load a product page, then you'd have to
add something to the cart, which took awhile, and so on. Images were crappy
and small, pages took forever to load, websites just in general didn't work
all that well, core principles of UI/UX we take for granted now hadn't really
been settled yet. And I had DSL, most at the time had dial-up.

Ordering things online back then was really annoying, and the grocery type
order, with lots of little things that are kind of hard to browse and sort (a
problem Instacart still struggles with today to be honest) made it especially
annoying for this kind of service. And I was a tech minded person who wanted
it to work and wanted to use it.

Online browsing and buying was really tedious, it's easy to forget just how
much so.

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bbcbasic
$100m revenue is impressive. But what are the gross margins on that?

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brandoncarl
Obviously hard to tell, but you can extrapolate a bit.

At $100mm in revenue, and an assumed $60 order price, you've got 1.6mm orders.
Assuming 25% of people pay for faster delivery, you've got gross revenue per
order of $4.50, or gross revenue of $7.2mm. If Instavart takes a 30% share
(similar-ish to Uber and iTunes), you're looking at $2.2mmin revenue after
paying contractors.

So that would leave you with 2.2% of sales as your margin after contractors.
This obviously changes if they mark up the groceries or if the assertions are
different.

Out of interest, a 15 P/E on 2bb would correspond to a 60x grow in their
market (ish). They currently represent about 100mm of Whole Foods 15bb take,
or about 0.67%. A 60x increase would take them to managing 40% of Whole Foods
orders, given no expansion into other grocery chains.

This is a lot of hand-waving, so please take it with a grain of salt.

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mrgordon
They do mark up the groceries

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foobarqux
They say they don't for "most" stores

[https://news.ycombinator.com/item?id=8707904](https://news.ycombinator.com/item?id=8707904)

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Implicated
As someone moving from the Central Valley in Ca to Portland in the next few
months...this is exciting to hear, I've been pretty excited to get to use this
service.

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ryanSrich
Instacart is still fairly expensive here in Portland. If you're living in the
city proper you should have a grocery store located < 5 blocks from where you
live. Just in the pearl I have walking access to Safeway, whole foods and food
front.

If you're in the suburbs it might be worth it.

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grandalf
Wow, congrats! I'm a big fan (and customer).

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queryly
That's great new! Going to grocery store is such a pain. Instacart delivers
you to the grocery store and bring you back after you've done shopping.

