The $10 billion national grocery store chain is making an investment in the four-year-old delivery startup, according to multiple sources. The size of the deal could not be learned, but sources say the deal is essentially done, barring an unforeseen last-minute change of heart.
The two companies have also signed a five-year delivery partnership, these people said, making Instacart the exclusive delivery partner for Whole Foods’ perishables business. Other terms of the deal could not be learned, but Instacart’s commercial agreements with its grocery store partners typically include a revenue sharing component.
This makes sense for both companies.
Del Ray back in October on what Amazon’s dominance and increasing investments in logistics means for delivery startups in the US:
To stay alive or thrive, traditional retailers are going to have to attempt to eventually match this delivery prowess, and only a handful have the logistical know-how to even come close.
Enter Deliv, Postmates and Uber, all private companies competing to be the outsourced delivery operation for a wide set of big retailers.
In December of last year Instacart increased the minimum grocery delivery fee from $3.99 to $5.99 and increased the Instacart Express subscription fee from $99 to $149, showing that delivering groceries is not inexpensive (yet). In September Instacart announced a partnership with Target.