TORONTO—American grocery delivery service Instacart is buying Toronto-based technology company Unata as part of its ambitious expansion efforts across Canada.
Instacart’s chief business officer Nilam Ganenthiran said Jan. 16 that the acquisition will give the company access to Unata’s digital flyer, loyalty, e-catering and list-building capabilities—and fits into its lofty goal of providing services to 80 per cent of Canadian consumers within the next 18 months.
Instacart wouldn’t outline how exactly it planned to reach that goal, but when asked if expansion would rely solely on its existing partnership with Loblaws, it stressed that the company is “designed to partner with many retailers to give customers many options.”
“Unata is a pioneer in bringing all of that online, just like Instacart is a pioneer in picking and packing groceries,” Ganenthiran said in an interview.
“We think this helps us bring to brick-and-mortar companies the chance to do more with us.”
Unata was founded in 2009 as a way to offer retailers a chance to digitize and introduce an online grocery platform. It has recently been toying with voice-activation services that would allow customers to place orders through devices like Google Home.
Instacart’s acquisition deal comes as the company is getting set to roll out in Ontario in Ottawa, St. Catharines, Niagara Falls and the Kitchener-Waterloo region through a Loblaw partnership.
The company first debuted in the Canadian market last December by working with the grocery store giant to offer deliveries within an hour to its customers in Toronto. Later this year, Instacart said it will launch with Loblaws in the Greater Vancouver Area.
Instacart faces fierce competition from e-commerce giant Amazon, which got into the grocery business when it purchased Whole Foods for US$13.7 billion last year.
Ganenthiran said he isn’t intimidated by Amazon because he feels their “threat is real but overblown” and that “smart grocers will rise to the challenge.”
He said brick-and-mortar grocers expanding to home delivery have an edge over online companies because they’ve been building relationships with customers for decades that are largely centred around their stores being so close to consumers.
“That’s an advantage that Whole Foods or Amazon will never have,” he said.
Instacart would not reveal financial terms of its deal with Unata, which a company spokeswoman said is expected to close “imminently.”
Unata will keep its Toronto headquarters as part of the deal.