Instacart Acquires Smart Cart and Grocery Checkout Technology Startup Caper AI

Today Instacart announced they had acquired Caper AI, a smart cart and grocery checkout technology company. Instacart confirmed to Techcrunch they paid $350 million for the company.

In Caper AI, Instacart acquires a portfolio of automated checkout and smart cart technology solutions, many of which are deployed in major national grocery retailers across North America. One such retailer is Kroger, which began deploying “KroGo Powered by Caper” smart shopping carts at a store in Kroger’s hometown of Cincinnati, Ohio, earlier this year.

Caper’s latest generation smart carts feature machine vision that allows shoppers to place the items in the cart and bypass counter checkout altogether.

Caper also has an automated checkout solution targeted towards smaller format stores. The company’s AI Counter utilizes a scale and machine vision to recognize up to 10 items and automate the checkout process.

According to the announcement, Instacart plans on integrating Caper’s technology into the Instacart app as well as both its in-store and online experiences for its grocery partners. One interesting potential application hinted at is a shoppable recipe integration with Caper’s smart carts: “Over time, Instacart expects to integrate Caper’s technology into the Instacart app and the ecommerce websites and apps of its retail partners, allowing customers to build online shopping lists and browse recipes ahead of time and check off their lists as they go. And, for Instacart shoppers who shop on behalf of customers, they can also utilize the carts to find items more efficiently and bypass long checkout lines.”

With the move, Instacart adds another tool to a growing arsenal of e-commerce and in-store technology solutions targeted towards grocery providers at a time many are beginning to question their relationship with the company. Over the past decade, Instacart has provided many grocery chains an easier glide path for moving into e-commerce and in-store shopping automation, areas with steep learning curves that grocers with tight margins have historically been more than happy to outsource. However, some grocers see Instacart’s in-store shopping service as taking too big a cut and possibly disintermediating them in the process.

However, as Instacart grows its enterprise technology solutions, I expect we’ll increasingly see its flagship shopper service decoupled from its technology as it looks to serve larger retailers who want greater control over the customer relationship. Since the start of the pandemic, many grocery retailers have started to roll out and standardize around their delivery services, which means a fast-growing market for technology solutions. My guess is Instacart is anticipating this as it rolls up some of the best-in-class independent solution providers as it prepares for an IPO soon.

In short, this move and others are part of Instacart evolving into a more diversified omnichannel grocery technology arms dealer.

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