In brief: DoorDash is reportedly in late-stage talks with Instacart to acquire the popular grocery delivery service as part of a deal valued at roughly $17 billion. An announcement could come as early as mid-week, sources said, who also warned that nothing has been finalized and the deal could still fall through.

Instacart was also recently tied to acquisition rumors with Uber, but sources say those talks are no longer active. It is unclear if Uber would try again if DoorDash comes up short.

Shares in DoorDash are up 2.61 percent on the news as of this writing, while Instacart's stock is down about the same percent. For reference, DoorDash has a market cap around $74.7 billion and Instacart is worth roughly $14 billion.

The potential buyout comes at a pivotal time for food delivery platforms. Gone are the boom days of pandemic ordering, and those that have survived this long now have to compete with rising labor costs, stricter regulations as it relates to employees / delivery drivers, and competition from heavyweight players like Amazon and Walmart.

As Reuters highlights, the deal would give Instacart access to DoorDash's vast delivery network and customer base. The outfit would also benefit from existing retail partnerships.

To be clear, the two platforms currently operate in similar but different categories. DoorDash specializes in restaurant/ fast food and convenience store delivery, while Instacart has traditionally focused on grocery delivery. Consolidation in the space could also be a win for consumers, as merging the services could result in one less monthly or annual subscription fee for those currently signed up to both services.

Source link