Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Grocery delivery company Instacart today announced that it has raised $400 million in new VC funding at a $3 billion pre-money valuation, confirming a deal that Axios first reported last week. Existing shareholder Sequoia Capital led the round, and was joined by a group of new and return backers: Wellcome Trust, Y Combinator Continuity, Andreessen Horowitz, FundersClub, Khosla Ventures, Kleiner Perkins Caufield & Byers, Initialized Capital, Thrive Capital and Valiant Capital.

Axios spoke with Instacart founder and CEO Apoorva Mehta. Some takeaways:

Income statement: Instacart remains unprofitable overall, but Mehta says it becomes profitable in individual markets around six months after launch. Last year Instacart expanded from 18 to 30 markets, and this year plans to add another 30 (inclusive of five new markets already launched).

Competition: "We think about this as a two horse race: Us and Amazon... Amazon is building their warehouses to compete with the entire grocery landscape, while we're empowering the entire grocery landscape. The reason we think we have a good shot against Amazon is that customers want choice. It's the same reason why people buy Netflix even if they have Amazon Prime ― you can't get House of Cards through Amazon. We have unique product from some of the best grocery stores in the country, and grocery is really a long-tail business where selection matters."

Fine-tuning: Instacart has spent the past 15 months analyzing and tinkering with its unit economics. For example, the company wasn't collecting beverage can and bottle deposits accurately until recently, and the fix has increased gross margins by 25 cents on average deliveries nationwide. It also wasn't accurately charging sales tax, which varies by county and by item. In some markets, for example, different types of juice get taxed differently depending on their percentage of water concentration. That fix has yielded around 30 cents.

Compensation: Instacart has taken heat over changes to its contractor compensation, including the substitution of a flat delivery service fee for tips. Mehta reiterated past comments that the move has increased pay for some and lowered it for others, and that the switch has introduced more predictability and made Instacart more competitive with rivals (Uber, etc. for "shoppers" and supermarkets for in-store "pickers"). More importantly, he says that users are sent the option to provide an extra tip via either push or email notifications after the delivery is concluded.

The future: Mehta acknowledged that Instacart is open to someday operating without contractors itself, but that for now it's most cost effective to do both the picking and delivery. It has, however, done some tests with alternate structures.

Go deeper

Why migrants are fleeing their homes for the U.S.

Illustration: Eniola Odetunde/Axios Photo: Herika Martinez /Getty Images 

Natural disasters in Central America, economic devastation, gang wars, political oppression, and a new administration are all driving the sharp rise in U.S.-Mexico border crossings — a budding crisis for President Biden.

Why it matters: Migration flows are complex and quickly politicized. Biden's policies are likely sending signals that are encouraging the surge — but that's only a small reason it's happening.

Cities' pandemic struggle to balance homelessness and public safety

Illustration: Sarah Grillo/Axios

Addressing homelessness has taken on new urgency in cities across the country over the past year, as officials grapple with a growing unhoused population and the need to preserve public safety during the coronavirus pandemic.

Why it matters: It’s led to tension when cities move in to clear encampments — often for health and safety reasons — causing some to rethink the role of law enforcement when interacting with people experiencing homelessness.

Biden to sign voting rights order to mark "Bloody Sunday" anniversary

President Biden will sign an executive order today, on the 56th anniversary of "Bloody Sunday," meant to promote voting rights, according to an administration official.

Why it matters: The executive order comes as Democrats face an uphill battle to pass a sweeping election bill meant, in part, to combat a growing number of proposals introduced by Republicans at the state level that would restrict voter access.