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Amazon Bought Instacart's Biggest Partner. It Was the Best Thing That Ever Happened to Them.

By Apoorva Mehta · Investing · 1 min read

Summer 2017. Whole Foods was 30-40% of Instacart's sales. Then the CEO called at dawn with a gut punch.

Key Points

Amazon bought Whole Foods -- Instacart's largest partner at 30-40% of sales
Mehta called an all-hands and told the company they were going to war mode
They signed every major grocery retailer and expanded dramatically across the country
By the time Whole Foods left, they were less than 1% of volume

Crisis is a gift. It allows for focus in a way that is so hard to create.

The Call at Dawn

Mehta: It's pretty rare for a company to not have moments where you think it's not going to work out. You're going to have that. It's just par for the course.

Mehta: Summer of 2017, I had this very early morning meeting with the CEO of Whole Foods, which was the largest partner on Instacart. They had like 30-40% of our sales. He tells me in the first five seconds of the call that Amazon, our largest competitor, had decided to buy Whole Foods, our largest partner. It was a gut punch.

Amazon, our largest competitor, had decided to buy Whole Foods, our largest partner. It was a gut punch.

War Mode

Mehta: After I got my head together, I called an all-hands with the whole company and told them that this means we're going to be in war mode. We will prevail. We're going to come back in the next couple of weeks with a plan.

Mehta: And that's what we did. That plan involved signing every major grocery retailer on Instacart, continuing to expand dramatically across the country, and growing our subscription business very significantly as well.

This means we're going to be in war mode. We will prevail.

By the Time Whole Foods Left, They Were Less Than 1%

Mehta: By the time Whole Foods left our platform, they were less than 1% of our volume. We had every major grocer in the country on our platform. The team rallied. We came out far stronger. Today we're far larger than Amazon.

Mehta: A lot of times, crisis is an opportunity. Crisis is a gift. It allows for focus in a way that is so hard to create. Every company talks about sense of urgency and execution excellence. But here we had this moment in time when our largest competitor had just bought our largest partner. How do you create that moment? There was only one way out -- to really fight through it. We used this as an opportunity to rally the team, and the team worked harder than they've ever done.

Crisis is a gift. It allows for focus in a way that is so hard to create.