Cash injection boosts online deliveries in US

When consumers in the United States turned to online grocery delivery services amid the COVID-19 pandemic to avoid venturing into brick-and-mortar stores, venture capitalists seized the opportunity to invest billions in a booming market.

Investors poured $18.4 billion into online grocery startups last year and $6.8 billion in food delivery startups, including grocery and restaurant takeout orders, according to research company PitchBook Data.

But as the pandemic wanes and consumers feel more confident to shop at supermarkets again, a Bloomberg report suggests that while there still will be growth in the sector, companies will have to broaden what they offer to stay relevant post-pandemic.

"Meal delivery services look for new ways to grow in cities big and small," Bloomberg reported last month.

Instacart, a 10-year-old grocery delivery company based in San Francisco, has already announced plans to expand its technology.

It will provide the underlying infrastructure and software tools for grocery store checkouts and fulfillment centers, websites and smart shopping carts.

The business began offering enterprise technology to grocery partners in 2017. Instacart's technology powers e-commerce platforms for grocers including ALDI, Costco Canada, Heinen's and Walmart Canada.

In October, Instacart acquired Caper AI, a leading AI-powered shopping cart and checkout technology platform. It also acquired FoodStorm to offer advanced orders and catering technology for retailers.

In March last year, Instacart raised $265 million from investment firms including Sequoia Capital, D1 Capital Partners and Andreessen Horowitz, reported The Wall Street Journal.

"We'll continue to deepen our investment in our suite of enterprise technology services, unlocking new solutions that help power e-commerce platforms of retailers across North America," said Instacart CEO Fidji Simo in a statement.

Leading on-demand delivery platform DoorDash has announced that it had entered into a definitive agreement to acquire hospitality technology startup Bbot.

Bbot's products and technology will be added to DoorDash's platform. It will offer restaurateurs and other food and beverage operators and merchants solutions in-store and online, including in-store digital ordering and payment.

"We're excited to bring our combined suite to an even wider selection of merchants including bars, hotels and ghost kitchens," said Tom Pickett, DoorDash's chief revenue officer, in a statement.

Founded in California in 2013,DoorDash connects consumers with local and national businesses across the US, Canada, Australia, Japan and Germany.

Uber Eats, another food delivery service app with 24 percent of market share, acquired food delivery service Postmates in November 2020 for $2.65 billion in stock, according to Bloomberg.

Since then, Uber Eats has diversified to offer deliveries for groceries, alcohol and flowers.

In November, Uber Eats created membership service Uber One that offers discounts for late deliveries and a fee for unlimited deliveries along with other perks.

Gopuff, an instant delivery service in New York, partnered with several companies this month to broaden its reach, offering customers discounts on fuel, grocery, insurance and vehicle maintenance, as well as access to tax services and mileage tracking tools.

In July, Gopuff raised $1 billion from investors Fidelity Investments, SoftBank Vision Fund 1,Blackstone's Horizon platform and Guggenheim Investments, reported The Wall Street Journal. The company is valued at $15 billion.

Online groceries and related apps accounted for more than half of the total $39.3 billion invested last year across the entire food tech sector.