Instacart was founded in 2012 with a simple mission — to become the Amazon Prime (NASDAQ:AMZN) of grocery delivery. In 2021, the company boasts nearly 10 million active users and over 500,000 "shoppers," Instacart's term for its delivery drivers. It finally turned in its first profitable month during the COVID-19 pandemic, in April 2020.

The thing is, though, physical grocery stores haven't disappeared. Instacart is well aware of this, and it's charting a path into physical retail with the $350 million acquisition of Caper AI, a startup that builds smart cart and cashier-less checkout technology. The acquisition is part of Instacart's "B2B2C" retail technology strategy that it hopes will allow it to compete with the likes of Amazon, which offers similar innovations.

Instacart, now valued at around $39 billion, is expanding its suite of services for brick-and-mortar locations, building instant checkout technology that can help physical grocery stores provide better service. The move comes not long after Instacart acquired FoodStorm, a catering software company geared toward managing large orders of ready-made food.

"Over the years, Instacart has continued to expand its retailer enablement services, helping brick-and-mortar grocers across North America move their businesses online, grow and meet the evolving needs of their customers. As we look ahead, we're focused on creating even more ways for retailers to develop unified commerce offerings that help address consumer needs across both online and in-store shopping," said CEO Fidji Simo.

"That's why we're thrilled to welcome the Caper AI team to Instacart," she continued. "We share the same goal of equipping retailers with new and innovative technologies that help them succeed in an increasingly competitive industry, while also providing customers with the best possible experience. We're excited to bring Caper's leading smart carts and smart checkout platform to more retailers around the world, as we all reimagine the future of grocery together."

"The powerful technology we've created is intuitive for customers, easy to deploy for retailers of all sizes, and creates a physical retail ecosystem that never existed before," said Lindon Gao, co-founder and CEO of Caper AI.

"We're thrilled to welcome the Caper AI team to Instacart. We share the same goal of equipping retailers with new and innovative technologies that help them succeed in an increasingly competitive industry, while also providing customers with the best possible experience," said Simo. "We're excited to bring Caper's leading smart carts and smart checkout platform to more retailers around the world, as we all reimagine the future of grocery together."

But in the meantime, the two new product additions will allow Instacart to expand its B2B sales, a trend that's on the rise among large retailers and companies. Amazon, for example, has been selling its cashier-less technology to other retailers since 2020. Meanwhile, Walmart (NYSE:WMT) recently began selling its e-commerce technology to small and medium-sized businesses, and Israeli company Trigo brought on supermarket giant Tesco (OTC:TSCDY) to deploy its technology in Tesco stores.

Moving forward, Instacart will likely keep its labor situation in the back of its mind. The company hired 300,000 shoppers in April 2020, just after the pandemic had set in, but it has since come under fire for what critics describe as unscrupulous labor practices.