Columnist Cory Weinberg has this piece in The Information:
"You won’t find this nugget in Instacart’s IPO filing, nor is it likely to be noted on the company’s first-ever earnings call next week. Even most employees don’t know about it. But I found out recently that Publix - one of the largest grocery chains in the U.S. and a key Instacart customer - wrote a significant check in Instacart’s Series D fundraising round six years ago, alongside Sequoia Capital.
"It’s a delicious fact: A famed Florida sub-sandwich purveyor was right next to venture capital royalty on the Instacart cap table.
"Why keep a seemingly insignificant detail like that under wraps? Possibly for competitive reasons. Instacart saw an edge in keeping its retail partners - particularly big regional chains like Publix - away from competitors like, say, DoorDash, which has also been driving to grow its grocery business."
Weinberg writes that Instacart "is much more reliant on just a few customers" than competitors such as DoorDash. "It generates 43% of its grocery sales from just three retailers.
"Instacart’s grocery relationships so far seem sticky, in part because of those earlier stock deals with grocers. It’s notable, for instance, that DoorDash has never been able to pry Publix away from Instacart. Instacart has tried to emphasize that it is now more of a 'grocery technology' company with deep ties to grocers in fueling delivery, pickup and e-commerce options."
- KC's View:
The stickiness of these deals will take Instacart a long way, but only as long as it continues to grow and prove their value to the retailer's bottom line. I would imagine that this would take two forms - if Instacart improves retailers' value proposition, it will make the retailers more successful. At the same time, this should make Instacart's stock more valuable, which also serves the retailer's bottom line.
Momentum matters. And Instacart has to know that, which is why it continues to innovate.