News broke this month that long-time partners Whole Foods and Instacart are dissolving their relationship. The two company’s had enjoyed a fruitful partnership since 2014—prior to Whole Foods’ acquisition by Amazon—a tech titan and grocery delivery rival to Instacart.
Instacart Founder and Chief Executive Officer Apoorva Mehta detailed what will be a gradual dissolution of Whole Foods and Instacart’s partnership in a blog post.
“The first phase of this transition starts today, which means that we have to start scaling back our in-store shopper operations within Whole Foods locations. Today, we have 1,415 in-store shoppers across 76 Whole Foods locations,” wrote Mehta. “Out of this community of in-store shoppers at Whole Foods, 243 will be impacted beginning February 10, 2019. In the months that follow, we expect to ramp down all remaining Whole Foods in-store shopping operations in preparation for Whole Foods to fully exit our marketplace in the coming months.”
Whole Foods is expected to leave the Instacart market entirely by mid-2019, though those in-store shoppers working across multiple retail partners will be minimally affected. This split comes roughly a year after Amazon acquired Whole Foods in 2017. With Amazon bringing with them Amazon Fresh, their own grocery delivery service, it was bad news for Instacart from the beginning.
News of the split comes just weeks after Business Insider reported that, despite owning Whole Foods, groceries delivered from the grocer through Amazon's services were more expensive than those purchased through Instacart.
Instacart is planning to offer transfer bonuses to the more than 75 percent of in-store Whole Foods shoppers as they transition to new stores. For the unfortunate few laid off, Instacart will provide a minimum of 3-months separation package based on maximum monthly pay from 2018.
The future of Instacart may not be all doom and gloom, however, as TechCrunch reports that at a valuation in October the company raised $600 million at a $7.6 billion valuation. This comes only six months after bringing in a $150 million round and eight months after a $200 million financing valuing the business at $4.2 billion.
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