Instacart has become a household name, transforming the way millions of people shop for groceries. With the click of a button, Instacart connects you with a personal shopper who will pick up everything on your list and deliver it right to your doorstep. It‘s a service that has proven invaluable to many, from busy parents to seniors with mobility issues.
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But have you ever wondered who is really behind this revolutionary company? When you place an order on Instacart, where does your money go and who profits? The answer involves a complex corporate structure with Instacart operating as a subsidiary of a lesser-known entity called Maplebear Inc. So let‘s peel back the layers and see what we find.
Maplebear Inc: The Parent Company Controlling Instacart
While Instacart is the public face and brand name we all recognize, it‘s actually just one branch on a bigger corporate tree. The official parent company of Instacart is Maplebear Inc, a holding company incorporated in Delaware.
Not much is publicly known about Maplebear, as it keeps a low profile compared to its famous subsidiary. According to business databases, Maplebear oversees around a dozen different entities involved in logistics, delivery, and transportation. These sister companies to Instacart appear to handle things like trucking, warehousing, and last-mile delivery to support Instacart‘s operations behind the scenes.
Based on the most recent data, Maplebear and its subsidiaries employ over 7,000 people (though most of those are likely Instacart workers) and generate estimated annual revenues approaching $1 billion. Of course, with Instacart‘s explosive growth in recent years, those numbers may already be much higher.
Apoorva Mehta: The Founder Behind the Curtain
Every great company starts with a visionary founder, and for Instacart that person is Apoorva Mehta. Raised in India and Canada, Mehta studied engineering before working at Amazon and other tech firms. The idea for Instacart came to him from the frustration of lugging home groceries in San Francisco without a car.
Along with co-founders Max Mullen and Brandon Leonardo, Mehta launched Instacart in 2012 and served as CEO for its first decade of operation. He guided the company through multiple funding rounds, reaching a staggering valuation of $39 billion by 2021.
That skyrocketing growth made the 30-something Mehta a billionaire on paper, with a personal stake of around 10% in the company he built. Not bad for a guy who had previously launched 20 failed startups before finally striking gold with Instacart.
In 2021, after achieving his vision of making Instacart a leader in grocery e-commerce, Mehta decided to step back from the CEO role. He transitioned to the position of executive chairman of the board of directors for Maplebear, where he still helps steer Instacart‘s long-term strategy.
Meet Fidji Simo: Instacart‘s New Boss
Since July of 2021, Instacart has been led by CEO Fidji Simo, a veteran tech executive originally from France. Her background includes high-level positions overseeing product development at Facebook and eBay before making the leap to head Instacart.
As a woman in the male-dominated tech industry, Simo has shattered glass ceilings throughout her career. She was the first in her family to graduate high school and went on to earn a master‘s degree in management. At Facebook, she rose to lead the development of the Facebook app used by billions around the globe.
Now at Instacart, Simo has ambitious plans to expand beyond groceries into delivering a wide range of products from local retailers. She sees an opportunity to build on Instacart‘s success by making it a one-stop-shop for same-day delivery of almost any everyday item a household might need.
Under Simo‘s leadership, Instacart aims to go public on the stock market in the near future, a move that would likely make Apoorva Mehta and Maplebear‘s other private investors even wealthier on paper. But Simo will have to navigate challenges like increased competition and issues with Instacart‘s reliance on gig workers to make that vision a reality.
Instacart‘s Web of Retail Partnerships
Part of what has fueled Instacart‘s rapid rise is the company‘s skill at forming partnerships with major retailers across North America. Over the years, Instacart has inked deals with a who‘s who of supermarket chains and big box stores, including Kroger, Costco, Walmart, Target, and Albertsons to name just a few.
These retailers see Instacart as a way to offer online shopping and delivery to their customers without building out their own expensive e-commerce infrastructure. In exchange for a cut of each sale, Instacart provides both the ordering technology and the army of gig workers to pick and deliver orders.
As a result of all these partnerships, Instacart now boasts a presence in over 5,500 cities, reaching more than 85% of U.S. households and 70% of Canadian ones. That sprawling geographic footprint has made it the default grocery delivery provider for a huge portion of the population.
However, some retailers have been wary of giving too much power to Instacart, viewing it as an "800-pound gorilla" that could try to undermine their own direct relationships with customers. After all, when someone in Chicago orders groceries from their local Jewel-Osco through Instacart, Instacart learns valuable data about that customer‘s preferences and purchasing habits.
Instacart has tried to position itself as an ally rather than a threat to its retail partners, but that underlying tension remains. And now big players like Walmart and Target are investing heavily in building up their own delivery networks, potentially siphoning off order volume from Instacart. How Apoorva Mehta, Fidji Simo and the Maplebear board navigate these crucial relationships will help determine if Instacart sinks or swims in the years ahead.
The Gig Workers Powering Instacart‘s Operations
While the Instacart app may seem like magic to the end customer, there are hundreds of thousands of hardworking gig workers operating behind the scenes to make those deliveries happen. Instacart shoppers are the ones combing the aisles of local supermarkets to find your items and then delivering them to your home in a matter of hours.
The vast majority of these workers are independent contractors, not employees. That has enabled Instacart to rapidly scale up its workforce as demand for its services has grown. But it has also led to friction with shoppers who feel they are not being adequately compensated or protected given their importance to Instacart‘s business model.
During the challenges of the COVID-19 pandemic, some Instacart workers staged strikes to push for hazard pay, protective equipment, and expanded sick leave policies, arguing that they were providing an essential service to homebound customers while putting their own health at risk. Under public pressure, Instacart did make some concessions like providing masks and hand sanitizer to workers.
More broadly, Instacart has fought legal and legislative battles at the state level to preserve its ability to classify workers as contractors rather than employees. Like other gig economy platforms, Instacart argues that its shoppers value the flexibility to set their own schedules. But labor activists counter that Instacart is denying workers basic protections to pad its bottom line.
As scrutiny of the gig economy model has intensified, Instacart has begun offering more perks to shoppers, like providing some healthcare subsidies and offering professional development resources through a partnership with Stride. But the underlying debate over gig worker status remains unresolved.
How Instacart classifies and compensates its massive workforce will have major implications for the company‘s cost structure and profitability as it eyes an eventual public offering. Balancing the interests of workers, customers, and shareholders is an immense challenge that Apoorva Mehta and now Fidji Simo have had to grapple with as Instacart has matured.
What‘s Next for Instacart and Maplebear?
From scrappy startup to U.S. household brand in under a decade, Instacart has come a long way under the ownership of Maplebear Inc and the leadership of Apoorva Mehta and his successor Fidji Simo. But in many ways, the company‘s journey is still just beginning.
With an IPO looming on the horizon, Instacart will soon face increased scrutiny from public markets and pressure to demonstrate a path to sustained profitability. Can Fidji Simo execute on her vision of making Instacart a "retailer for retailers" by expanding into delivering all kinds of goods, not just groceries?
At the same time, Instacart must defend its turf as competitors like DoorDash, Uber, and players encroach on the rapid delivery space while facing potential shifts in consumer behavior if inflation and economic uncertainty cut into e-commerce spending.
The next few years will be a critical test for Instacart and the entire concept of groceries on demand. Billions of dollars of market value are on the line, not to mention the livelihoods of hundreds of thousands of gig workers and the shopping habits of millions of consumers.
Through it all, the little-known Maplebear holding company will be quietly steering the ship for its crown jewel Instacart brand. So the next time you place an Instacart order, take a moment to marvel at the vast corporate enterprise and pioneering vision of Apoorva Mehta that have made your grocery delivery possible. Then be sure to tip your shopper before diving into those hard-earned snacks.
