Now that Amazon.com is delivering Whole Foods groceries ordered online in several major markets, including San Francisco, life is about to get much tougher for Instacart. The online grocery delivery service—valued at more than $4 billion by investors—once had an exclusive agreement to fulfill orders of perishable food from Whole Foods. Last year the grocery chain accounted for more than 10% of Instacart’s business, according to a person close to the company, although it lately has dropped to less than 8%.
To stay competitive, Instacart is partnering with as many other supermarket chains as it can—and is also building a business selling advertising on its website, according to CEO Apoorva Mehta.