{"id":419,"date":"2026-03-19T12:47:55","date_gmt":"2026-03-19T12:47:55","guid":{"rendered":"https:\/\/www.spxcommerce.com\/blog\/?p=419"},"modified":"2026-03-25T09:46:43","modified_gmt":"2026-03-25T09:46:43","slug":"how-does-instacart-work","status":"publish","type":"post","link":"https:\/\/www.spxcommerce.com\/blog\/how-does-instacart-work\/","title":{"rendered":"How Does Instacart Work: Revenue Model & Key Features"},"content":{"rendered":"

Have you ever wondered how a grocery delivery application, which was created on the basis of I hate shopping for groceries myself became a billion-dollar company? That is how Instacart all started, and it is as interesting as the platform itself.<\/span><\/p>\n

If you’ve been curious about how Instacart works and makes money, what makes its business model tick, or how you can launch something similar, you’re in the right place.\u00a0<\/span><\/p>\n

Here we are dissecting it down in this blog, starting with the story of the founding of Instacart and their three-sided marketplace model, to their various revenue streams and the features of the platform.<\/span><\/p>\n

Let’s dive in.<\/span><\/p>\n

When Did Instacart Start? A Quick Origin Story<\/b><\/h2>\n

When did Instacart start? It starts in 2012, when Apoorva Mehta, an ex-Amazon engineer, along with Max Mullen and Brandon Leonardo, resolved a highly personal issue, the vexation of shopping for groceries.<\/span><\/p>\n

Apoorva had worked in Amazon for years and observed how customer loyalty was triggered by speed and experience in delivery. He used the same principles to develop Instacart. There is a legend that when Mehta made the very first order through the initial version of the app, he herself carried the groceries by walking to the shop and getting the products personally. Talk about bootstrapping!<\/span><\/p>\n

Instacart opened up shop in San Francisco, expanded quickly by word-of-mouth, and in 2015 the company had an approximate of 200 employees. It is functional in thousands of cities in the US and Canada today, with more than 14.4 million daily active users and <\/span>annual revenue of $3.38 billion in 2024<\/span><\/a>.<\/span><\/p>\n

Instacart has a history of filling a niche and expanding expeditiously, which is why it started with a personal grocery complaint and ended up a grocery delivery business empire.<\/span><\/p>\n

Understanding the Instacart Business Model: A Three-Sided Marketplace<\/b><\/h2>\n

\"Instacart<\/p>\n

 <\/p>\n

Before we get into how Instacart makes money, it’s important to understand who the Instacart business model<\/a> actually serves. Instacart is a three-sided marketplace platform that is linked to three different groups:<\/span><\/p>\n

1. Retail Partners (Grocery Stores)<\/b><\/h3>\n

Such are grocery stores, supermarkets, and specialty stores that Instacart works with to add their products to the platform. Large chains have collaborated with Instacart to offer online storefronts without having to build their own, including Kroger, Costco, Whole Foods, and Aldi.<\/span><\/p>\n

Partners in retail receive greater digital reach, higher order volumes, and access to Instacart’s data analytics without bearing the cost of building their own delivery infrastructure.<\/span><\/p>\n

2. Instacart Shoppers (The Workforce)<\/b><\/h3>\n

The fulfilment model of Instacart relies on shoppers. They come in two forms:<\/span><\/p>\n