Nuro

Instacart

Nuro

For most of its life Nuro sold delivery-as-a-service. Retailers, restaurants and grocery chains paid Nuro to handle the last mile with autonomous vehicles, so instead of employing human drivers a partner simply used Nuro's robot fleet.

The economics are compelling on paper. A human delivery driver costs $15-25 per hour including wages, insurance, and vehicle costs.

A Nuro vehicle costs money to build and maintain, but once deployed, it operates nearly 24/7 with no driver wages, no tips, and no breaks. The breakeven point comes when the fleet reaches sufficient utilization in a market.

That was the plan, anyway. In 2024 Nuro changed course and stopped trying to run a delivery service itself.

The business now is licensing the autonomy stack — the Nuro Driver — to carmakers and mobility companies, which is a far cheaper way to grow than building and operating your own fleet. FedEx, Domino's, Kroger, Walmart and 7-Eleven had all tested or deployed the delivery bots before the pivot.

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 was $871 million in 2023 and crossed $950 million in 2024.

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.

Nuro

Dave Ferguson and Jiajun Zhu were both principal engineers at Google's self-driving car project (later Waymo). Ferguson led the machine learning and motion planning teams.

Zhu worked on perception — teaching cars to see and understand the world. They were two of the most senior engineers in autonomous driving.

In 2016, they left Google with a contrarian insight: the hardest part of self-driving cars wasn't the technology. It was the stakes.

A robo-taxi carrying passengers needs to be essentially perfect — any accident could injure or kill someone inside and destroy public trust. But a delivery vehicle carrying groceries?

If it gets in a fender bender, the worst case is squished bananas.

By removing the human from the vehicle, Nuro eliminated the most complex variable in autonomous driving safety. Their vehicles are small, light (under 1,200 pounds), and slow (max 25 mph on surface streets).

If one hits a pedestrian, the impact energy is dramatically lower than a 4,000-pound car going 40 mph. This let them get regulatory approval years before full-size robo-taxis.

The first prototype, R1, looked like a cartoon car — about half the width of a normal vehicle, with no windows, no mirrors, and no driver's seat. Just cargo space and sensors.

They revealed it in 2018 and began testing in Scottsdale, Arizona with Kroger for grocery deliveries.

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.

Nuro

Nuro's strategy is to become the default autonomous delivery infrastructure for major retailers. Rather than build a consumer-facing delivery app (competing with DoorDash and Instacart), Nuro provides the robotic fleet that powers deliveries for existing brands.

The partnership-first approach reduces go-to-market friction. Kroger, Walmart, and FedEx already have massive customer bases and order volumes.

Nuro provides the autonomous last-mile delivery layer. The retailer gets lower delivery costs.

Nuro gets guaranteed demand.

That was the original plan. Houston and Mountain View were the early markets, mapped city by city, each one needing its own regulatory approval before a single vehicle moved.

It was slow and it was expensive, and in 2024 Nuro gave it up in favour of licensing its self-driving software to companies that already build and operate vehicles.

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 announced it would add 300,000 shoppers, then raised that by another 250,000 weeks later. 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.

Nuro

The technology still has limitations in complex scenarios. Nuro vehicles operate on surface streets at low speeds — they can't handle highways, heavy snow, or extremely dense urban environments like Manhattan.

This limits the addressable market to suburban deliveries in good weather, which is a large market but not the whole market.

The path to profitability is long. Building custom autonomous vehicles is extraordinarily capital-intensive.

Each generation of vehicle requires hundreds of millions in design, engineering, testing, and manufacturing. Nuro has burned through most of its $2.1 billion in funding and laid off 30% of staff in 2023, signaling the cash crunch is real.

Competition comes from multiple directions. Amazon is developing its own delivery robots (Scout, though paused).

Waymo could pivot to autonomous delivery, though Cruise is no longer a threat after GM shut it down at the end of 2024. Established delivery companies could partner with other autonomy providers.

And human drivers remain cheaper than robots at current scale — the economics only flip once Nuro has hundreds or thousands of vehicles per market.

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.

Nuro

Nuro R3 — the third-generation autonomous delivery vehicle, purpose-built with no passenger compartment. Larger cargo capacity than R2, improved sensor suite, and designed for commercial-scale manufacturing.

Nuro Autonomy Platform — the self-driving software stack including perception, prediction, planning, and control that runs Nuro's vehicles. Nuro Driver — the AI system that handles all driving decisions in real-time, combining lidar, cameras, radar, and thermal sensors.

Nuro Fleet Management — cloud-based tools for partners to monitor, dispatch, and manage Nuro vehicles across delivery zones.

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.

Nuro

SoftBank Vision Fund led the massive $940 million Series B in 2019. Tiger Global led the Series C at an $8.6 billion valuation.

Greylock Partners and Gaorong Capital were early investors. Alphabet (Google's parent) invested through its venture arm.

Woven Capital (Toyota's investment fund) participated, reflecting automotive industry interest. The company has raised approximately $2.1 billion total.

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.