Instacart

Grab

Instacart

Instacart operates as a marketplace connecting consumers with personal shoppers and grocery retailers. Revenue comes from multiple streams: delivery fees and service fees charged to consumers (typically $3.99+ per delivery), tips to shoppers (passed through, not revenue), retailer partnerships (grocers pay Instacart for access to the platform and fulfillment services), and advertising.

Advertising has become the crown jewel. Instacart Ads lets consumer packaged goods (CPG) brands like Coca-Cola, Procter & Gamble, and Nestlé pay for sponsored product placements within the Instacart shopping experience.

When someone searches for "chips," Doritos can pay to appear first. This is incredibly valuable because it's advertising at the exact moment of purchase intent.

Ad revenue exceeded $900 million in 2023.

The retailer partnership model is key. Unlike DoorDash or Uber Eats (which listed restaurants without permission early on), Instacart works with grocers as partners.

Over 1,500 retail banners including Costco, Kroger, Albertsons, and Publix have formal partnerships. Instacart provides the technology and shoppers; grocers provide inventory and stores.

Grab

Grab operates a super-app model — one app that handles rides, food delivery, grocery delivery, package delivery, digital payments, insurance, lending, and investments. Revenue comes from commissions on each transaction across all verticals, plus financial services revenue from GrabFin (digital banking, lending, insurance).

The ride-hailing business is the foundation — Grab takes 20-25% of each ride fare. Food delivery (GrabFood) follows the same marketplace commission model as DoorDash or Uber Eats.

GrabMart handles grocery and convenience delivery.

The financial services segment is the long-term play. Grab has digital banking licenses in Singapore, Malaysia, and Indonesia.

In a region where 70% of adults are unbanked or underbanked, providing basic financial services through the same app people use to order rides is a massive opportunity. GrabPay processes billions in transactions annually.

The lending arm provides small business loans to merchants on the Grab platform.

Instacart

Apoorva Mehta was a 26-year-old Amazon engineer in Seattle who quit his job in 2012 to start a company. The only problem: he had no idea what to build.

Over the next year, he started and abandoned roughly 20 different projects. A social network for lawyers.

A way to track restaurant wait times. Nothing stuck.

Then one day he was too lazy to go grocery shopping. He looked for a service that would shop for him and deliver everything to his door.

Nothing good existed. The existing options were grocery store delivery services that only worked during specific windows, had limited selection, and required ordering days in advance.

Mehta wanted to order groceries the way he ordered everything else online — immediately, from whatever store he wanted.

He built a prototype in 2012 and applied to Y Combinator. The demo was rough — he ordered a six-pack of beer through the app and had it delivered to a YC partner's house during the application process.

It worked. He got in.

Instacart launched in the San Francisco Bay Area in 2013 with a simple promise: order from your favorite local grocery store and have someone shop for you and deliver within an hour.

Grab

Anthony Tan grew up in Malaysia as the grandson of the founder of Tan Chong Motor, one of the country's largest car distributors. Despite the family business, he was obsessed with the problems of Southeast Asian transportation.

Taxis in Malaysia were notoriously unreliable — meters were broken, drivers refused short trips, and women felt unsafe riding alone.

At Harvard Business School in 2011, Tan and classmate Tan Hooi Ling (no relation) entered a business plan competition with an idea for a taxi-hailing app adapted for Southeast Asia. They didn't win.

But they built it anyway.

MyTeksi (later renamed Grab) launched in Malaysia in 2012 as a taxi-hailing app. The key insight was that Southeast Asia needed a fundamentally different approach than Uber.

The region has 700 million people across 11 countries, each with different languages, currencies, regulations, and transportation norms. In Indonesia and Vietnam, motorbikes outnumber cars 10 to 1.

In the Philippines, cash is king — credit card penetration is under 5%. Grab built for these realities from day one.

They added motorbike rides (GrabBike), cash payments, and local-language support before Uber even thought about them.

Instacart

Instacart grew by solving a problem one city at a time. They launched in San Francisco, proved the model, then expanded to other major metros.

Each new market required recruiting shoppers, signing up retailers, and building enough consumer density to make the economics work.

The COVID-19 pandemic was the inflection point. Grocery delivery went from luxury to necessity overnight.

In March 2020, Instacart hired 300,000 new shoppers in a single month. Order volume increased 500%.

Years of planned growth happened in weeks. The pandemic proved that grocery delivery wasn't a niche — it was the future of how a significant chunk of the population would shop.

The enterprise play is the long-term moat. By providing white-label technology to grocers, Instacart becomes embedded in their operations.

Even if a grocery chain wanted to build its own delivery service, they'd need years and hundreds of millions to replicate what Instacart provides. The more deeply integrated Instacart becomes in grocery operations, the harder it is to rip out.

Grab

Grab's growth strategy was hyperlocal execution at continental scale. Each country in Southeast Asia is effectively a different market with different regulations, languages, payment preferences, and transportation norms.

Grab built separate operations in each country with local teams who understood the nuances.

The Uber war was defining. From 2014 to 2018, Grab and Uber fought a brutal subsidy war across Southeast Asia, spending billions on driver incentives and rider promotions.

Grab's advantage was local knowledge — they had motorbike rides, cash payments, and government relationships that Uber lacked. In March 2018, Uber surrendered entirely, selling its Southeast Asian operations to Grab in exchange for a 27.5% equity stake.

It was one of the most decisive wins by a local champion over a Silicon Valley giant.

The super-app strategy creates a flywheel. A user who orders rides on Grab starts using GrabFood, then GrabPay, then GrabFin products.

Each new service increases the time spent in the app and the switching costs. In Southeast Asia, where most people only have one or two apps for daily services, being that app is everything.

Instacart

The post-COVID hangover was brutal. After pandemic demand normalized, growth slowed dramatically.

The company's valuation dropped from a peak of $39 billion in early 2021 to about $10 billion at IPO in September 2023. Investors who bought at the peak saw a 75% paper loss.

The narrative shifted from "essential infrastructure" to "nice-to-have luxury."

Unit economics are perpetually tight. Paying a person to walk through a grocery store, pick items, bag them, and drive them to someone's house is expensive.

Unlike meal delivery (one restaurant, one bag), grocery delivery involves dozens of items per order, refrigeration requirements, and substitution decisions. Every order that requires a shopper to call the customer about an out-of-stock item eats into efficiency.

Amazon is the existential threat. Amazon Fresh, Whole Foods delivery, and Amazon's own logistics network represent a competitor with nearly unlimited resources and a Prime membership base of 200+ million.

Amazon has been willing to lose billions on grocery delivery to build market share. Instacart's advantage is retailer partnerships — Kroger and Publix use Instacart specifically because they don't want to help Amazon dominate grocery.

Grab

Profitability has been the constant struggle. Grab went public via SPAC in December 2021 at a $40 billion valuation and proceeded to lose over $1.7 billion in 2022.

The stock price crashed over 70% from its SPAC debut. The company finally achieved quarterly profitability in Q3 2023, but sustaining it across 8 countries with different economic conditions is incredibly hard.

Competition is fierce on every front. GoTo (the merged Gojek-Tokopedia entity) is the arch-rival in Indonesia, the largest market in the region.

Shopee (owned by Sea Group) competes in food delivery and payments. Regional and local players challenge Grab in every country.

Running a super-app means competing with specialists on every front simultaneously.

Regulatory complexity across 8 countries is a nightmare. Each country has different rules on ride-hailing, food delivery, digital banking, and data privacy.

Indonesia banned motorbike ride-hailing apps for a while. Vietnam requires data localization.

Singapore has strict fintech regulations. A regulatory change in any single country can blow a hole in quarterly results.

Instacart

Instacart Marketplace — the core platform where consumers order groceries from 80,000+ stores for delivery or pickup, with personal shoppers fulfilling orders. Instacart+ — subscription service ($9.99/month) offering free delivery on orders over $35, reduced service fees, and credit back on pickup orders.

Instacart Ads — a retail media platform letting CPG brands run sponsored product listings, display ads, and coupons within the shopping experience. Instacart Platform (Enterprise) — white-label e-commerce technology that lets grocers build their own online ordering and fulfillment powered by Instacart's infrastructure.

Caper Cart — AI-powered smart shopping carts (from the 2021 Caper AI acquisition) with built-in screens, barcode scanners, and payment that let shoppers skip the checkout line.

Grab

GrabRide — ride-hailing across cars, motorbikes, and taxis in 8 Southeast Asian countries. GrabFood — food delivery service and the market leader in Southeast Asia, operating in over 500 cities.

GrabPay — a digital wallet and payments platform used by millions for in-app payments, peer-to-peer transfers, and in-store purchases. GrabFin — financial services including digital banking (via digibank licenses), micro-lending for drivers and merchants, and insurance products.

GrabMart — grocery and convenience delivery, including dark store operations for rapid delivery.

Instacart

Sequoia Capital was an early and consistent backer. Andreessen Horowitz invested in growth rounds.

D1 Capital Partners led the 2021 round that valued Instacart at $39 billion. Existing investors including Valiant Capital, T.

Rowe Price, Fidelity, and Tiger Global participated across rounds. Y Combinator was the starting point (Summer 2012 batch).

The September 2023 IPO on NASDAQ priced at $30 per share, valuing the company at approximately $10 billion.

Grab

SoftBank Vision Fund has been the largest and most influential investor, deploying billions across multiple rounds. Didi Chuxing (China's ride-hailing giant) invested strategically.

Toyota invested $1 billion for mobility partnerships. Microsoft, Booking Holdings, and Uber (via the 2018 deal) are significant shareholders.

GIC (Singapore's sovereign wealth fund) and Temasek invested in later rounds. The SPAC merger with Altimeter Growth Corp in December 2021 valued Grab at approximately $40 billion.