• Company has mountain of cash on balance sheet
• Strategic partnership with Uber fuels takeover talk

Instacart [NASDAQ:CART] is on the lookout for bolt-on acquisitions that add services to its retail platform, CEO Fidji Simo said.

The online grocery delivery and pickup service provider regularly reviews acquisition targets and “will not hesitate” to make a deal when it finds the right fit, Simo said on the sidelines of last week’s Goldman Sachs Communacopia + Technology Conference in San Francisco.

It seeks technology solutions to meet the online and in-store needs of national grocery chains as well as independently owned and operated food markets, she said. Those include services to power e-commerce experiences, fulfill orders, digitize brick-and-mortar stores, provide advertising, glean insights from customer data, and educate shoppers about nutrition.

“We care less about deal size and more about fit within the corporate thesis,” Simo said.

She said Instacart can finance future deals with cash, stock, or a combination of the two.

Instacart had USD 1.4bn in cash and equivalents on its balance sheet as of 30 June.

The San Francisco-based company has made multiple acquisitions on Simo’s watch.

A few months after she was appointed CEO in July 2021, Instacart bought Caper AI, a New York-based shopping cart and checkout technology platform, for USD 350m. That same year, it bought Melbourne, Australia-based CaterXpress Pty, aka FoodStorm, an order-ahead and catering software firm. Then in 2022, Instacart acquired Eversight, a Palo Alto, California-based marketing technology firm, and Rosie, an Ithaca, New York-based e-commerce platform for local and independent retailers and wholesalers. Terms of those deals were not disclosed.

The company, which is incorporated under the name Maplebear, went public in September 2023. It first filed for an initial public offering in 2021, but market volatility delayed its listing.

It priced its stock at USD 30 at the IPO, which valued Instacart at about USD 10bn on a fully diluted basis, down from the USD 39bn valuation it received from venture capital firms when it raised money in the private markets during the COVID-19 pandemic in 2021. On its first day of trading, the stock popped to USD 42 a share, before selling down to USD 33.70 at the close.

At the opening of trading Monday, Instacart had a market capitalization of USD 9.6bn.

In May, Instacart entered into a strategic partnership with Uber Eats to allow its customers to order deliveries from restaurants. A new restaurant tab was added to the Instacart app to give customers the option to order from nearby eateries, and have their food delivered by Uber.

The partnership has fueled speculation that Uber [NYSE:UBER] could eventually acquire Instacart, a sector advisor noted. Uber, which has a USD 150bn market cap, is large enough to absorb Instacart, but such a deal would invite regulatory scrutiny, according to the advisor.

In January, months before the partnership was announced, then-Wolfe Research analyst Deepak Mathivanan published a note that flagged Instacart as an attractive takeover target for Uber.

The ride-share operator has made acquisitions in the space previously. Uber acquired online grocery provider Cornershop  for USD 1.4bn in an all-stock transaction in 2019, food delivery service Postmates for USD 2.65bn in stock in 2020, and alcohol delivery service Drizly for USD 1.1bn in stock and cash in 2021. Uber shut down Drizly earlier this year. Uber had nearly USD 4.7bn in cash and equivalents on its balance sheet as of 30 June.

Uber did not return a message seeking comment, and Instacart declined to comment.

Instacart helps more than 1,500 national, regional, and local retailers facilitate online shopping, delivery and pickup services from more than 85,000 stores across North America.