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A complete guide of Instacart Business model-revenue

by johnwilliamson about a year ago in apps
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Start a business like Instacart

An on-demand platform that creates wonder in delivering groceries.

Yeah... It's Insta cart

They provide their service in most parts of the USA.

Its business model is completely driven by technology.

They deliver your order within an hour.

This grocery delivery app had become famous in the on-demand tech sector.

Most entrepreneurs show interest in learning a lot about their business model. To build their own well-updated business model.

This post would allow you to understand how it works and how they generate. revenue.

Information that you need to know

It was founded in the year 2012. To start a business like Instacart you need to know this information.

Founder: Apoorva Mehta ( CEO/ Founder) and Max Mullen (Co-founder)

Funding Received: $275 million( till mid 2015)

Value of the company:$ 2 billion ( as per June 2015)

Revenue : $ 100 million

This business start-up gained the trust of most investors. It received a lot of funding.

Significant features of Insta cart:

It is placed in all the major locations of the USA including SF Bay Area, San Jose, Nyc, Brooklyn, Washington Dc, Philadelphia, Boston, Chicago, Austin, Seattle, and Los Angeles.

They have a collection of 3,00,000 items from which the customers could place their order.

The crowdsourced business model in which it connects the personal shopper and the app users. the shoppers then make the delivery.

Value Proposition

  • They built a partnership with the prevailing supermarkets.
  • Huge willing workers and their cars.
  • Extensive Inventory
  • Very Quick delivery
  • Zero Warehouse
  • Zero delivery truck

key customer segments:


  • They are the one who places the order through the app
  • They can place the order through their gadgets.
  • They pay their bills through online modes.
  • They could schedule their orders.


  • They get their orders on their smartphones
  • They are the ones who are closer to the stores.
  • They pick up the orders and deliver them to the customers manually.
  • Apart from the hourly pay, they could collect tips from users.


  • They have a partnership with the biggest store's in the city.
  • They have an increase in revenue by selling their products on the app.

Explaining the workflow of Instacart

  1. The customer is the one who starts the process by placing an order.
  2. The order summary is then sent to the Shopper who makes the shopping for the user
  3. The shopper pays the bill through the prepaid debit card provided by Instacart.
  4. The shopper then delivers it to the user who had placed the order.

How does Instacart make money?

Fee from delivery

The purchase did for 35$ would have a delivery fee of $3.99 for scheduled and

$5.99 for orders placed before 1 hour.

Fee for membership:

Instacart provides a Yearly membership at $99 who choose to subscribe to their annual plan.

Marked up price( added 15%)

Some stores sell their products at the same price as they sell in-store. But some stores add a 15% additional price to their normal price to help Insta cart to pay the shoppers.

How Instacart finds their prospects?

  • Through word of mouth
  • Through online marketing
  • Free delivery for the first time
  • Multiple offers

Shoppers recruiting process

The application is accepted from those who are willing to earn from Insta cart.

The applications are processed and the hiring process involves face to face interview

Proper training is provided to Shoppers before they are deployed.

Key issues to look for: 0

  • Retention of shoppers
  • Reducing delivery time
  • Shortage in no of shoppers.
  • Customer trust issues
  • Item misplacement
  • Future of Grocery delivery

The market has only a minimal no of Competitors and it is the right time to penetrate the market. If you are willing to start a business like Instacart then you may need software to manage the whole business from a single place. And it must be integrated with mobile apps. I hope this information is helpful to you.


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