DoorDash is currently in advanced negotiations to acquire Instacart in a deal that values the grocery platform at approxmiately US$17 billion. The potential acquisition could be finalized as early as Wednesday, according to a source familiar with the matter.
The $17 billion bid for Instacart's grocery network
The proposed US$17 billion valuation represents a significant premium over Instacart's market value, which stood at roughly US$13 billion as of last Friday's close. Following the news of the advanced talks, shares of Instacart climbed by about eight per cent, while DoorDash shares saw a decline of around six per cent. As reported by Reuters, the deal would allow DoorDash to integrate Instacart's established retailer relationships with its own extensive delivery infrastructure.
This move is designed to transform DoorDash from a restaurant-centric service into a comprehensive logistics giant. By absorbing Instacart, DoorDash can leverage a pre-existing marketplace of grocery partners, reducing the friction associated with building direct retail ties from scratch.
Why Uber is no longer in the running for Instacart
While Uber had previously held preliminary discussions regarding a potential purchase of Instacart, a source told Reuters that those talks are no longer active. This leaves DoorDash as the primary suitor in a high-stakes battle for the grocery delivery market. Nick Smith, co-founder of Manifesto Growth Architects, suggests that DoorDash is a more "natural fit" for Instacart because its restaurant delivery network complements Instacart's grocery expertise more effectively than Uber's broader convenience platform model.
The exit of Uber from these negotiations simplifies the path toward a deal, but it also highlights the diverging strategies of the two delivery titans. While Uber has sought to deepen its position as an everyday convenience app , DoorDash is aggressively pursuing a dominant footprint in the specific vertical of scheduled and on-demand grocery shopping.
The shift from restaurant delivery to the Deliveroo and Postmates model
The pursuit of Instacart is part of a wider industry trend where delivery platforms are diversifying to survive the post-pandemic slump. According to the report, this consolidation is evidenced by DoorDash's previous acquisition of Deliveroo and Uber's purchases of Postmates and Delivery Hero. These companies are racing to expand into retail and grocery to offset the challenges of rising labor costs and stricter regulations regarding delivery worker rights .
For the average consumer, this trend suggests a future where a single app manages every physical delivery need, from a midnight snack to a weekly grocery haul.. However, the industry is still struggling to find a path to consistent profitability as the initial boom in online ordering fades and competition intensifies.
The $80 million cost of winding down Caper Cart
Parallel to the acquisition talks, Instacart is streamlining its operations by exiting the hardware space. In a regulatory filing on Monday, Instacart announced it will wind down its Caper Cart smart shopping-cart business by the end of the second quarter of 2027. The company expects to incur pre-tax charges between US$55 million and US$80 million as a result of this decision.
The decision to abandon Caper Cart suggests that Instacart is prioritizing its software marketplace and logistics over physical in-store technology. for a potential buyer like DoorDash , a leaner Instacart focused purely on the delivery marketplace may be more attractive than one burdened by the capital-intensive maintenance of smart hardware.
Will the $17 billion valuation satisfy Instacart shareholders?
Despite the "advanced" nature of the talks, several critical questions remain. First, it is unclear if the US$17 bilion figure is a firm offer or a starting point for final negotiations, especially given that the deal could still fall apart before Wednesday. Additionally , while the Wall Street Journal and Reuters have cited sources familiar with the matter, neither DoorDash nor Instacart has officially confirmed the terms of the deal.
There is also the question of regulatory scrutiny. A merger of this size between two dominant delivery players could trigger antitrust concerns, though the source cited by Reuters has not indicated that regulatory hurdles are currently blocking the Wednesday timeline.
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