According to reports from The Information, Instacart is exploring a potential sale and has held preliminary discussions with prospective buyers, including Uber and DoorDash. The company's shares closed around 9% higher on Friday following the report, with Instacart having a market capitalisation of approximately $12 billion at Thursday's close. The discussions are ongoing, and there is no guarantee that a deal will materialise, as reported by The Information.
A potential acquisition by Uber or DoorDash could value Instacart at approximately $16 billion to $17 billion, based on takeover premiums of 30% to 40% in line with recent technology deals, according to The Information. The acquisition would strengthen the buyer's presence in the online grocery delivery market by combining Instacart's established marketplace and retailer relationships with the acquirer's extensive delivery network and customer base. However, a transaction involving either company could attract antitrust scrutiny from regulators, as such a deal would further consolidate the US food delivery market.
According to The Information, Instacart has faced increasing competition as food delivery companies and online retailers expand into grocery and convenience products. Last year, Instacart lowered the minimum order value for free delivery for its members to $10, seeking to strengthen its competitive position as DoorDash and Uber Eats expanded their grocery delivery services. Amazon is also increasing its presence in the segment through Amazon Now, a quick-delivery service that offers groceries and essential items in 30 minutes or less.
As reported by The Information, DoorDash held discussions in 2021 about acquiring Instacart in a potential transaction that would have valued the company at between $40 billion and $50 billion. Those discussions ultimately collapsed amid concerns over whether the proposed deal would secure antitrust approval under the Biden administration. Separately, Uber agreed in July to a deal worth nearly $15 billion to acquire Germany's Delivery Hero, according to The Information, underscoring the broader consolidation trend in the delivery sector.
According to The Information, shares of Uber fell around 3% on Friday, while DoorDash shares declined approximately 4% following the report. An acquisition of Instacart could give either Uber or DoorDash access to its existing retailer partnerships and grocery marketplace, potentially strengthening its ability to compete with Amazon and other delivery providers. The latest discussions come as competition intensifies across the food and grocery delivery industry, prompting major platforms to explore ways to expand their customer bases and strengthen their market positions.
