DoorDash (NASDAQ: DASH) is in advanced talks to acquire grocery-delivery platform Instacart (NASDAQ: CART) in a transaction that could value the company at approximately $17 billion, The Wall Street Journal reported on October 26, citing people familiar with the negotiations.
The deal could be completed as soon as this week, although the discussions could still collapse. Reuters’ report on the potential acquisition also said talks between Instacart and Uber Technologies (NYSE: UBER) are no longer active.
The potential transaction would bring together DoorDash’s restaurant-delivery network and Instacart’s grocery marketplace, giving DoorDash a larger presence in online grocery shopping. The companies have not announced a definitive agreement.
Investors reacted differently to the news on October 26. Instacart shares rose about 8%, while DoorDash stock fell roughly 6%, reflecting different market expectations for the companies under a possible deal.
Why DoorDash Wants Instacart
An acquisition would give DoorDash greater access to Instacart’s grocery customers and established relationships with retailers. DoorDash has expanded beyond restaurant orders into grocery and retail delivery, while Instacart has built its business around shopping and delivery from supermarkets and other stores.
The potential deal comes as delivery companies face pressure to expand their services and compete for repeat customers. The Information’s earlier report on Instacart’s sale process said the company had explored a sale and held preliminary discussions with DoorDash and Uber.
Competition from Amazon (NASDAQ: AMZN), Walmart (NYSE: WMT) and retailers developing their own online ordering services has added pressure to the grocery-delivery market. A combination could give DoorDash a broader offering, though the companies would still need to integrate their operations and customer platforms.
The companies previously discussed a possible acquisition in 2021, when Instacart’s reported valuation was substantially higher. Those negotiations did not result in a deal.
$17 Billion Valuation and Regulatory Questions
The reported $17 billion valuation would represent a premium to Instacart’s market value before news of the latest negotiations. Reuters reported that Instacart had a market capitalization of about $13 billion as of Friday’s close, October 23.
A transaction would also face regulatory review because the companies compete in parts of the food and grocery delivery market. Regulators could examine how a combination would affect competition, merchants and consumers, although the outcome of any review is uncertain.
Instacart has been operating as a public company since its 2023 listing. Its potential sale comes as it seeks to compete in a market where large platforms can combine grocery delivery with restaurant orders and other services. Wealthier Today’s coverage of Uber’s planned $2.3 billion ezCater acquisition highlights the broader push by delivery companies to expand into additional meal and convenience categories.
For DoorDash, buying Instacart could accelerate its grocery ambitions, but the price, financing structure and potential regulatory conditions would determine whether the deal delivers value. Until an agreement is confirmed, the reported acquisition remains a possibility rather than a completed transaction.