(File) Instacart founder and CEO Apoorva Mehta, stands in the Bi-Rite Market on Divisadero Street on Thursday, July 24, 2014 in San Francisco, Calif.
Image: Lea Suzuki/The San Francisco Chronicle via Getty Images
An empty refrigerator. That’s what it took to change Apoorva Mehta’s life.
The son of immigrant parents, who went from India to Libya and Canada, Mehta is a newly-minted billionaire worth a staggering $1.3 billion, while a company that he founded—thanks to the inspiration he found from an empty refrigerator—is worth $12 billion.
The 37-year-old Mehta is the founder of Instacart, a grocery delivery platform with over 7.7 million users and a network of over 80,000 stores in the US, and, until yesterday, served as the company’s chairman. Instacart went public on September 18 after a $9.9 billion IPO in the US and since then has rallied to be valued at over $12 billion.
“More than a decade ago, I was sitting in my apartment in San Francisco bemoaning the fact that the only thing I had in my refrigerator was hot sauce,” Mehta wrote on LinkedIn soon after his company went public. “Don’t get me wrong, I love hot sauce, but you can’t exactly make it a meal.”
That’s how Instacart was born, with the idea to help millions like Mehta shop for groceries from the comfort of their homes. “My empty refrigerator was an ongoing problem—and a source of inspiration,” Mehta adds. “It was 2012 and I could shop for everything online, except groceries. That was a lightbulb moment for me, and I got started coding the first version of the Instacart app.”
Instacart currently offers its services through a website and mobile app that allows customers to order groceries from retailers with the shopping being done by a shopper. In Instacart's early days, Mehta, who did not own a car, made the deliveries himself via Uber. Since then, the company has grown to have over 600,000 such shoppers and, over the years has had a phenomenal run, especially during the pandemic, raising billions from investors, including the likes of Sequoia Capital, Andreessen Horowitz, and PepsiCo.
Instacart wasn’t Mehta’s first tryst with building his venture. A former employee at Amazon, Qualcomm, and Blackberry, with an engineering degree from the University of Waterloo, he had already tried building some 20 different ideas before starting Instacart from his kitchen. That included a product focussed on social networking for lawyers.Also: Stagnation, losses: Why the economics of startups need a fundamental reset
“Grocery is the largest category in all of retail, with an annual spend of approximately $1.1 trillion in the United States in 2022,” Instacart said in its prospectus filed with the US Securities and Exchange Commission. Despite the size, Instacart says only 12 percent of US grocery shopping took place online compared to 66 percent of consumer electronics, 38 percent of apparel, 23 percent of consumer food service, and 20 percent of home goods.
Instacart, which was once valued at over $39 billion after various funding rounds in the private markets pre-IPO, had priced its IPO at $30 per share as it went public on September 19, before a 12 percent rally on the stock sent its market capitalisation to over $11 billion. “While this is an important milestone, the work Instacart is (doing is) only just beginning. I can’t wait to see how the team continues to transform the grocery industry.”
For the six months ended June 30, Instacart reported revenues of $1.48 billion, up 31 percent from the same period last year. Profits surged to $242 million during the six-month period, compared with a loss of $74 million loss a year ago. Much of that resurgence is attributed to the company’s CEO Fidji Simo who took over in 2021, after Mehta transitioned into chairman. The company had laid out plans to go public in May 2022 but delayed the listing over fears of a recession.
Meanwhile, after the blockbuster listing, Mehta has left the board handing over his charge to Simo, even though he will remain the largest individual shareholder with a 10 percent stake. “A lot of people have said that perhaps I was pushed out of the company,” Mehta told Forbes in an interview. “The reality is, if I wanted to be the CEO of Instacart, I would be the CEO of Instacart.”Also read: Quick commerce last mile delivery: Indispensable or superfluous?
The 37-year-old will instead turn his attention to his newly-founded company, Cloud Health Systems, which aims to address obesity through a service it recently launched, known as Sunrise. The health-tech startup has already raised $42 million from investors, including Thrive Capital, Andreessen Horowitz, and General Catalyst. It was valued at $200 million in a November 2022 financing round.
“Since I transitioned from CEO to executive chairman a year ago, I realised that I want to pursue a new mission and I want to do it with the same singular focus that I had while building Instacart,” Mehta had said on X, formerly Twitter, in July last year. “Stepping off the board will allow me to do just that.” However, last year, the startup courted controversy when US-based Helio Logistics, which operates healthcare provider NextMed, filed a case against Mehta and Cloud Health Systems for creating a copycat product and stealing trade secrets. The lawsuit was settled in February this year.
That means, Mehta is now getting ready for the next round. If his first round was anything to go by, Mehta is in for a win.