Instacart Inc. is acquiring Caper AI, a startup that makes self-checkout shopping carts, for $350 million in cash and stock in an effort to tap more areas of growth ahead of the online grocery giant’s anticipated public stock offering.
New York-based Caper, which was founded in 2016, uses image-recognition cameras and weight sensors to automatically detect items as they’re placed in the cart, eliminating the need to individually scan groceries. The “smart” carts are also equipped with a payment terminal that allows customers to check out without having to wait in line. The carts are currently available at Instacart partners Kroger Co. and Wakefern Food Corp. in the U.S. and other retailers in Canada, Spain and France, Instacart said in a statement Tuesday.
The acquisition is Instacart’s fifth since its founding in 2012, and the largest yet as the company ramps up investments to boost its technology offerings for retailers. Supermarkets are reevaluating their dependence on Instacart after the pandemic forced them onto the delivery giant’s marketplace to capture the surge in customers migrating to online grocery shopping amid Covid-19 lockdowns.
Instacart’s enterprise offerings range from last-mile delivery to building websites and rewards programs. Chief Executive Officer Fidji Simo said in an interview that she’s made this part of the business “even more of a priority” since taking the top job in August. “I think it’s incredibly important for Instacart to really be the chief ally to grocers. Anything that helps them, helps us.”
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The San Francisco-based company is gearing up to go public just as competition in grocery delivery in the U.S. grows with DoorDash Inc. and Uber Technologies Inc. ramping up services of their own. Simo said she’s “confident in Instacart’s unit economics,” and that while the company is still profitable, she will be more focused on growth going forward.
Caper, which also makes a self-checkout counter in addition to its carts, will streamline the in-store shopping experience and ultimately persuade shoppers to buy more, Simo said. The technology opens up other potential revenue streams through a subscription service fee and advertising on the cart’s touchscreen. Eventually, Instacart expects to integrate Caper into the marketplace app and websites of retail partners so customers can build shopping lists online and access them in-store.
Instacart also recently acquired FoodStorm, which offers order-ahead and catering technology for retailers. Simo said Instacart will be making additional investments in the coming months in a bid to keep grocers off all sizes competitive. “Amazon is investing a lot on these kinds of technologies, but that kind of capital expenditure is out of reach for many grocers. It’s important for us to offer them the ability to compete.”
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