DoorDash Acquires Instacart for $17 Billion
Last week, the news became official: DoorDash acquired Instacart for $17 billion. Earlier in the week, when the deal was still a rumor, Needham, an investment bank, suggested the acquisition was about combining advertising businesses.
What Does This Deal Mean for Commerce Media?
At first glance, it seems like a delivery app buying another delivery app. However, DoorDash is acquiring Instacart's diverse revenue stream, particularly its robust advertising business. DoorDash has been trying to expand its ad capabilities for years, including a $175 million acquisition of ad-tech company Symbiosys in 2025.
The Margin Difference
- Instacart's advertising and other revenues reached $297 million in Q2, accounting for 28.5% of its total earnings.
- DoorDash, on the other hand, reported a $1 billion run rate in ads two years ago, which is around 10% of its revenue.
Both companies have significant ad businesses, but only Instacart operates as a true commerce media platform.
How Instacart Set the Bar
Instacart's success in advertising can be attributed to its unique position in the market:
- Grocery Delivery: Instacart bundles baskets from various retailers, offering brands a comprehensive reach across categories.
- Direct Consumer Relationships: Instacart has direct relationships with consumers, who opt-in to share loyalty card data for rewards.
- Planogram Model: They control product placement based on brand deals, giving them a competitive edge.
These factors solidify Instacart's position as a powerful player in commerce media, making its acquisition by DoorDash a strategic move.