Instacart Reportedly Adding Deliveries to Businesses in Clash With Amazon, Walmart

Instacart reportedly wants to be top-of-mind when small businesses need office supplies and snacks.

The Information reported Tuesday (Feb. 14) that the firm, primarily known for delivering groceries to homes, aims to expand its market before beginning a potential initial public offering (IPO).

The small business-focused project — dubbed “Instacart Business” — is still in development and does not have a launch date, according to the report, which cited an unnamed source.

An Instacart spokesperson told PYMNTS in an email that the firm declined to comment on the report.

The firm already offers same-day delivery from Staples and Office Depot but is still thought of primarily as a provider of grocery delivery — a service that has seen diminished demand since the end of the pandemic, according to the report.

A business offering — especially a business-specific subscription service that is also being considered — would put Instacart into head-to-head competition with Amazon, which offers a business version of Prime, and Walmart, which provides both a small business version of its website and a Walmart Business+ subscription program, the report said.

The report comes after a year in which Instacart lowered its internal valuation four times — from $24 billion in March 2022 to $15 billion in July, $13 billion in October and $10 billion in December, according to an earlier report from The Information.

PYMNTS research has found that consumer adoption of online grocery shopping has lagged behind their embrace of digital restaurant engagement.

While 54% of men and 47% of women engage with restaurants via digital channels, only 42% and 31% respectively do the same with grocers, according to the PYMNTS study, “ConnectedEconomy Monthly Report: The Gender Divide.”

At the same time, aggregators are stepping up their efforts to offer everything on demand.

As PYMNTS reported in November, food delivery service DoorDash has partnered with Sephora and expanded the selection of cosmetics it delivers from stores, and Uber Eats expanded its partnership with Grocery Outlet to move beyond delivery from restaurants and meet consumers’ weekly grocery needs.

With these moves, aggregators are diversifying their delivery portfolios as they try to differentiate themselves from the competition.