Sequoia Leads $8.5M Investment in Instacart

Instacart is a really interesting business (it&#x27;s a logistics play, not a retailer, and logistics is stealthily really sexy – it doesn&#x27;t matter what sells, you win), but the thing is, US is at least ten to fifteen <i>years</i> behind the rest of the world in grocery sales:<p><a href="http://www.ocadogroup.com" rel="nofollow">http:&#x2F;&#x2F;www.ocadogroup.com</a> <a href="http://www.lse.co.uk/ShareChart.asp?sharechart=OCDO&amp;share=ocado" rel="nofollow">http:&#x2F;&#x2F;www.lse.co.uk&#x2F;ShareChart.asp?sharechart=OCDO&amp;share=oc...</a><p>(amongst many – every major UK supermarket has a popular home delivery service).<p>It&#x27;s up there with mobile and wireline Internet, and cable TV, for areas where moving to the US has felt like moving back to the mid-nineties... there are other areas where the US is unquestionably the leader, but yeah.

In case you need reminding: The reason this is funny is that Sequoia pissed away $200M over WebVan.

That&#x27;s $8.5M they&#x27;re going to spend proving (or disproving) market viability, at which point, if it&#x27;s working:<p>- The stores themselves will just roll out their own competing services. They can&#x27;t afford for a middle man to eat their margins.<p>- Existing players like Fresh Direct will leverage their complete control over stock and distribution to beat them on price and service. There&#x27;s a lot of wiggle room when you don&#x27;t have to deal with stocking physical store shelves.<p>I guess, thanks to AirBNB&#x2F;Uber, that &#x27;collaborative consumption&#x27; is the new hot VC investment.

I really wish Instacart or something similar succeeds. The state of grocery delivery in the Silicon Valley is far from ideal.<p>The key, though, would get the supermarkets involved. The only way to lower the delivery price and stay profitable is to convince the stores that it&#x27;s in their interest.