July 14, 2023
A 26-year-old former Amazon engineer built a $39 billion company in less than a decade after 20 failed startup attempts. This is the story of how a relentless pursuit of solving a simple problem turned into one of the most helpful services of our time: Instacart.
Born and raised in Canada, Apoorva Mehta’s curiosity about technology led him to pursue an electrical engineering degree at the University of Waterloo. After graduation, he worked for tech companies like Qualcomm and BlackBerry and even spent some time at a steel factory. His quest for a challenging role led him to Amazon, where he worked as a supply chain engineer.
After two years, Apoorva left Amazon feeling unchallenged and frustrated.
This is where his journey into entrepreneurship began. Apoorva spent the next two years putting what he learned during his time in his tech roles to use. During this time, he started around 20 different start-ups ranging from a social media platform for lawyers to a network for gaming companies, but none of his ideas took off. Apoorva enjoyed the process of creating and beginning new ventures but couldn’t understand why none of his products would find success.
He eventually realized that it was his missing passion.
“After going through all these failures, releasing feature after feature, I realized it wasn’t that I couldn’t find a product that worked, I just didn’t care about the product,” Mehta said of the social network for lawyers. “When I went home, I wouldn’t think about it because I didn’t care about lawyers. I didn’t think of what lawyers did day to day.”
After 20+ failures, Apoorva began seeking out problems he would face on a daily basis. Living in San Francisco without a car, Apoorva found it challenging to get the groceries he needed for his love of cooking. This personal problem led to the idea of Instacart, an on-demand grocery delivery platform. Despite the failure of similar ventures like Webvan during the dotcom bust, Apoorva believed in his idea and its timing, given the ubiquity of smartphones and the growing comfort of people with online transactions. With this idea, Apoorva launched Instacart in 2012, but the journey to success was anything but smooth.
In the early days of Instacart, Apoorva and his small team had to manually fulfill orders themselves, racing through grocery stores to pick items and deliver them on time. They worked tirelessly, iterating on their model, improving the app, and slowly building a customer base. In addition to having to deal with keeping the platform functioning, Apoorva also struggled to find funding for his idea. He was rejected by dozens of venture capitalists as they weren’t sure what Instacart actually was.
Y Combinator was one of the VCs that initially rejected Instacart. Despite this, Apoorva didn’t give up and sent one of the YC partners, Gary Tan, a pack of beer through the Instacart app. The next day, Apoorva got an interview and was then accepted into the program. From there, with the help of YC, Apoorva and his team kept expanding and improving on different parts of Instacart.
Instacart finally started to gain traction. They formed partnerships with major grocery chains, providing them with a platform to reach online customers. This was a win-win situation, as it allowed grocery stores to expand their customer base and provided Instacart with a steady supply of products.
As the customer base grew, so did the team. Instacart started hiring personal shoppers who would pick up and deliver the groceries. This model allowed for rapid scaling and expansion into new markets. By 2014, just two years after its launch, Instacart was already serving 10 major cities across the U.S. The company continued to grow, fueled by Apoorva's vision and the team's dedication to providing a seamless and convenient grocery shopping experience.
Over the next few years, Instacart dealt with a plethora of challenges. One of these were profit margins with Instacart losing $16 for every order delivered. Faced with this daunting task, the team at Instacart rallied together. They scrutinized every aspect of their operations, looking for ways to improve efficiency and reduce costs. They renegotiated contracts with grocery stores, improved their order routing algorithms to reduce delivery times, and introduced new features to encourage larger order sizes. They were able to break even within 8 months.
Instacart continued seeing gradual growth with its revenue rising from $525 million in 2018 to $735 million in 2019. When the pandemic hit in 2020, Instacart saw unprecedented growth with revenue reaching $1.5 billion. Instacart eventually reached a peak internal valuation at $39 billion in 2021. However, as pandemic restrictions began to ease, Apoorva faced new challenges. In 2022, Instacart had slashed $15 billion from its internal valuation. This reduction was due to a combination of factors, including increased competition and changes in consumer behavior as pandemic restrictions eased.
Despite these challenges, Apoorva Mehta, much like the company he founded, continues to persevere. He is constantly innovating and adapting to meet the changing needs of Instacart's customers and the evolving grocery delivery market. While the road ahead may be uncertain, Apoorva's journey so far demonstrates his resilience and unwavering commitment.
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