(Bloomberg)—Instacart Inc. said it agreed to acquire Toronto-based startup Unata Inc., giving the grocery-delivery company new kinds of e-commerce tools and a path to expand in Canada.
The deal totals about $65 million, according to two people familiar with the matter, and signals where Instacart is headed in its battle with Amazon.com Inc., No. 1 in the Internet Retailer 2017 Top 500
Unata specializes in making and tracking digital coupons and circulars. The company is also developing a voice-activated tool to allow customers to purchase goods online from midsize retailers using devices like Google Home.
Amazon has been encouraging customers to order groceries through Alexa, the assistant that powers its popular Echo speakers and a growing list of electronics from other manufacturers. Last year, Amazon made a massive bet on the grocery business with the $13.7 billion purchase of Whole Foods.
That deal created an awkward dynamic for Instacart, which had considered Whole Foods a premier partner and investor. Following the announcement, Instacart CEO Apoorva Mehta said in a statement that Amazon had “just declared war on every supermarket and corner store in America.”
Mehta has taken further steps since then to position his company as the prime alternative to the world’s largest online retailer. After raising $400 million last year, Instacart expanded from just 30 markets in the U.S. to 190 locations in North America, including Ontario, Canada. Instacart delivers groceries from Albertsons Cos. (No. 157), Costco Wholesale Corp. (No. 9), Kroger Co. (No. 88) and other retailers.
Unata may help Instacart develop catering services or an online tool to order custom birthday cakes from a nearby grocery store, said the people familiar with the matter, who asked not to be identified because the details are private. The firm is also expected to help San Francisco-based Instacart accelerate growth in Canada. Unata serves a dozen grocery chains in the country.