Instacart Is Shopping Itself to the Rivals Squeezing It, and Uber Has Already Walked Away From the Table

Instacart is looking for a buyer, and the names on its list are the same companies eating into its grocery business. The company has been working with an investment bank to weigh its options and has held preliminary talks with potential buyers including DoorDash, The Information reported on Friday. The discussions are early and may not produce a deal.

One suitor is already gone. Instacart recently shopped itself to Uber, but Uber walked away and the two are no longer talking, a person familiar with the matter told Bloomberg. No reason was given.

Investors liked the idea

Instacart, legally named Maplebear, rose as much as 9.2% to $56.44 on Friday and closed about 9% higher. Uber fell about 3% and DoorDash about 4%. The jump pushed Instacart's market value past $13 billion, with the stock up 25% this year.

A typical takeover premium of 30% to 40% would value the company at roughly $16 billion to $17 billion, according to the report's estimate.

Squeezed from both sides

The pressure on Instacart is easy to see. Uber and DoorDash keep pushing deeper into grocery, and Amazon is expanding Amazon Now, which delivers groceries and essentials in 30 minutes or less. Last year Instacart cut the free delivery minimum for Instacart+ members to $10 to keep up.

"Instacart risks getting squeezed between retailers building their own digital channels and larger platforms that can bundle grocery with other services, giving consumers more reasons to keep coming back," said Emarketer analyst Zak Stambor. "For Instacart, a deal could provide the resources and reach to compete more effectively than it could on its own."

Uber has been consolidating hard. In July it struck a nearly $15 billion deal for Germany's Delivery Hero, whose boards have since backed the takeover.

The deal that died once already

DoorDash and Instacart have been here before. In 2021 DoorDash held talks to buy Instacart at a $40 billion to $50 billion valuation, and the deal fell apart over worries that the Biden administration would block it on antitrust grounds. Any tie up now would again bulk up two of the biggest US delivery platforms.

Stambor thinks a deal is plausible this time, since the Trump administration has shown "greater willingness" to approve mergers, though regulators could demand that parts of the business be sold off.

Instacart declined to comment. Uber and DoorDash did not immediately respond. For now, Instacart is worth a fraction of the price DoorDash once discussed, and this time Instacart is the one asking.

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