The grocery business is plagued by notoriously slim margins. The trade group Food Marketing Institute estimates the supermarket industry as a whole turned in a 1.3% net profit after taxes in 2013 on $620 billion in sales.
Those numbers haven’t stopped venture capitalists like Mr. Mortiz from taking a chance again. “After our experiences with Webvan and the electroshock therapy we needed, none of us thought we’d venture ever again into the grocery business,” said Mr. Moritz, who sits on Instacart’s board. “The one thing we were very right about is that if there is an easy and reliable way to order groceries from home, the demand will be insatiable.”
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