DoorDash Negotiates to Acquire Instacart
DoorDash is reportedly in advanced discussions to purchase Instacart, which could value the grocery delivery service at approximately $17 billion, according to a source who spoke to Reuters on Monday.
A resolution could arrive as soon as Wednesday, though it’s important to note that it may not be finalized as planned, the source mentioned. Additionally, talks between Instacart and Uber have ceased, the individual added.
Shares of Instacart, which had a market capitalization of around $13 billion at the end of trading on Friday, saw an increase of roughly 8% during regular trading hours, while DoorDash’s stock dropped about 6%.
The Wall Street Journal first reported these developments on Monday.
The food delivery sector has been facing challenges like rising labor expenses, stricter regulations on delivery personnel, and increased competition, especially as the surge in online ordering from the pandemic has diminished.
This potential acquisition emerges as delivery services are branching out into grocery and retail sectors, aiming for growth beyond merely food delivery, with DoorDash previously acquiring Deliveroo and Uber securing Postmates and Delivery Hero.
If the acquisition goes through, DoorDash would gain access to Instacart’s established marketplace and connections with retailers, allowing it to blend these resources with its extensive delivery network and customer base.
Instacart has been evaluating a possible sale, having preliminary conversations with various interested purchasers, including Uber and DoorDash, as reported by The Information on Friday.
Instacart declined to comment in response to inquiries from Reuters, while representatives from Uber and DoorDash did not reply immediately.
“From a strategic perspective, DoorDash seems to be a better match for Instacart, as it combines the strengths of its restaurant delivery services with Instacart’s grocery specialization,” explained Nick Smith, co-founder of the growth strategy consultancy Manifesto Growth Architects.
On the other hand, for Uber, the interest in Instacart would be about enhancing its position as a daily convenience platform. However, an acquisition would only be sensible if it brings additional customer value and profitable growth, rather than merely increasing scale.
In a separate regulatory announcement on Monday, Instacart indicated it would be winding down its Caper Cart smart shopping cart division by the end of the second quarter of 2027, anticipating pre-tax charges between $55 million and $80 million associated with this decision.
