A possible deal between DoorDash and Instacart is, according to analysts, less about two delivery apps joining forces and more about keeping up with the two giants already reshaping grocery delivery: Walmart and Amazon. The Wall Street Journal reported on Monday that DoorDash was in advanced talks to buy Instacart in a deal that would value Instacart at roughly $17 billion.
DoorDash and Instacart (Credits: MarketWatch)
According to the Journal’s report, a deal could be wrapped up as soon as this week, but talks could still fall through. Instacart declined to comment, while DoorDash did not immediately respond to a request for comment. No agreement has been announced, and the reports remain just that: reports of talks, not a confirmed transaction.
DoorDash Instacart Deal $17 Billion: Why Analysts Say It Makes Sense
Wedbush analysts said in a note on Monday that a deal made sense because Instacart is losing some online grocery-delivery business to Walmart and Amazon, who have rapidly built out their own online grocery-delivery networks. A combined DoorDash-Instacart company, they argued, would be better placed to go head to head with those retail giants.
“A combination of strong restaurant delivery plus a marketplace including various grocers from Instacart can be a critical combination against Walmart and Amazon in particular, who continue to push in this market as well,” Wedbush said.
The logic is straightforward. DoorDash is best known for restaurant delivery, while Instacart runs an online grocery marketplace connecting shoppers with retailers, earning revenue from delivery transactions, advertising and technology services. Put together, analysts say, the two would offer a broader delivery network, denser routes and a stronger grocery presence, all in a market where Walmart and Amazon already offer one-stop shopping and delivery at huge scale.
Other analysts have made a similar case. Wells Fargo analyst Ken Gawrelski described Instacart as an attractive asset supported by strong growth and healthy margins, while Citi analyst Ronald Josey expected Instacart’s gross transaction value to reach $42.3 billion in 2026. Those figures, analysts say, help explain why a buyer would be interested, even at a valuation well above Instacart’s roughly $13 billion market capitalisation.
What Happened to the Shares, and What Comes Next
Investors reacted in opposite directions on Monday. Instacart shares finished 7.9 percent higher, while DoorDash shares fell 6.1 percent during the regular session. DoorDash stock is already down 25.6 percent so far this year, amid concerns over cautious consumers, while Instacart stock is up around 35 percent year to date.
Reports also note that Instacart had explored a sale and held preliminary discussions with Uber, although Uber has reportedly walked away from negotiations. That leaves DoorDash as the most likely buyer in analysts’ eyes, but also leaves regulatory scrutiny as a major risk, given the overlap in grocery delivery.
For now, the story is a reported negotiation, not a done deal. If talks advance to a formal bid, the next questions will be price, regulatory review and how a combined company would actually operate. If they fall through, Instacart will remain an independent grocery marketplace, still competing with Walmart and Amazon on its own.
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Source: MarketWatch — read the full story there.
