Instacart in talks with DoorDash and Uber for sale: report

Instacart is reportedly in discussions with potential buyers, including Uber and DoorDash, for a possible sale, according to a report by The Information on Friday. Shares of Instacart rose by approximately 9 percent on Friday, with the company boasting a valuation of around US$12 billion as of Thursday. Should Instacart be acquired by Uber or DoorDash, it would bolster the buyer's ambitions in online grocery delivery by combining Instacart's existing marketplace and retailer relationships with the acquirer's extensive delivery network and customer base.

However, such a deal could face antitrust scrutiny as it would consolidate two of the largest food-delivery platforms in the US and contribute to a wave of consolidation.

In July, Uber announced a nearly US$15 billion acquisition of Germany's Delivery Hero. While Instacart's shares dropped by around 3 percent, DoorDash saw a 4 percent decrease. The report notes that discussions with potential buyers are ongoing, but there is no guarantee of a deal. If a takeover were to occur, it could be valued at roughly US$16 billion to US$17 billion, accounting for a typical premium of 30 to 40 percent based on recent technology deals.

Instacart recently lowered its minimum order for free delivery for Instacart+ members to US$10 in order to compete with rivals DoorDash and Uber Eats, which are expanding their grocery and convenience delivery services. Additionally, Amazon is also expanding its quick delivery service, Amazon Now, aiming to deliver groceries and essentials within 30 minutes.

Emarketer analyst Zak Stambor commented that Instacart may be at risk of being "squeezed between retailers building their own digital channels and larger platforms" that can bundle grocery with other services, thus giving consumers more reasons to stay engaged with the platform. A deal could provide Instacart with the resources and reach needed to compete more effectively than it could alone.

In 2021, DoorDash had held discussions to acquire Instacart in a potential deal that would have valued it between US$40 billion and US$50 billion. However, concerns about the Biden administration's antitrust approval led to the discussions being derailed. Stambor believes that the latest deal is plausible as the Trump administration has shown a "greater willingness" to approve deals, despite the potential cost of selling off parts of the business.