Instacart doubles its valuation for the second time since pandemic began

For the second time since the the pandemic began, Instacart has doubled its valuation as a privately-held startup.

The on-demand grocery delivery service said Tuesday that it is now worth $39 billion after raising $265 million in financing from some of its existing investors.

Instacart was previously valued at $17.7 billion in October after raising another $200 million in financing, up from its nearly $14 billion valuation in June. Prior to the pandemic, Instacart had been valued at just shy of $8 billion.

The company has raised $2.5 billion to date.

“Today’s fundraising reflects the strength of Instacart’s business, the growth our teams have delivered and the incredible opportunity ahead,” said Nick Giovanni, Instacart’s chief financial officer, in a statement. “This past year ushered in a new normal, changing the way people shop for groceries and goods.”

Giovanni, the former head of the global technology, media and telecom Group at Goldman Sachs, joined Instacart in late January as the company is reportedly making moves to go public. Last week, the company added two new board members, another possible sign it is preparing for a public offering.

After years of working to build momentum, Instacart and other food delivery services have found their moment during the pandemic as households shied away from going to stores. Since March, Instacart has added hundreds of thousands of new contract workers — who shop and deliver groceries — and raised hundreds of millions in new financing.

But as the company has grown, it has also had tensions with some of its workers over safety and pay. As CNN Business previously reported, Instacart is cutting more than 1,800 in-store shoppers, who are part-time employees of the company, as a result of changes in how it works with partners. Among those impacted is a small group of workers at an Illinois-based Kroger-owned Mariano’s store who had voted to unionize last year.

The company largely relies on contract workers who shop and deliver for the company. Along with DoorDash, Uber, and Lyft, Instacart has had to defend its business model of treating these workers as independent contractors, rather than employees who would be entitled to traditional labor protections and benefits under the law.

Instacart said it plans to use the new funding to further fuel growth, including increasing its corporate headcount of 2,000 people by 50% and supporting certain areas of its business, including its marketplace, and its enterprise offering, as well as its advertising function, which allows brands to reach customers.

Instacart partners with more than 600 retailers in North America, including Aldi, Costco, Kroger and Wegmans. More recently, the company has struck deals with Big Lots, Staples, and Walgreens on same-day delivery, giving consumers alternatives to Amazon.