Instacart’s latest partnerships will help diversify its retail and advertising businesses

The news: Instacart kicked off 2025 with several new partnerships aimed at growing its delivery and ad businesses.

• The company will provide same-day delivery for Ulta Beauty’s more than 1,400 US stores as it diversifies from grocery delivery.
• Instacart also inked a multi-year deal with Samsung that would let consumers order groceries from the app using their smart fridges.
• On the advertising front, Instacart’s Carrot Ads is growing its B2B reach by partnering with food service ecommerce platform Cut+Dry.

What it means: The new partnerships signal Instacart’s priorities in 2025 as it contends with slower growth.

While Instacart remains the largest grocery intermediary platform by a considerable margin, with a 57.7% market share, the company is facing growing competition from Uber and DoorDash. They see grocery as a considerable growth opportunity, one that would make their apps sticker.

• We expect Uber’s grocery sales to grow 18.6% in 2025 to $4.58 billion, while DoorDash’s will jump 22.9% to $8.26 billion.
• By comparison, Instacart’s grocery sales will grow more slowly at 9.8%, to $35.35 billion.

Instacart’s ad business is under similar pressure as retail media spending from its advertisers plateaus.

• The company is diversifying both the types of brands that advertise on its platform and where its ads appear—hence the partnership with Cut+Dry, which will give Instacart’s 6,000 active brand advertisers access to decisionmakers at restaurants, bars, and other businesses.
• Such moves could help Instacart win back spend from large CPGs, several of which cut spending on its Carrot Ads platform in 2024.
• We expect Instacart’s ad revenues to grow 8.8% this year to $1.05 billion

Our take: Instacart is leaning harder on partnerships to broaden its appeal and bring in new users.

Last year, the company inked deals with The New York Times and Uber, among others, to reach new audiences and expand the array of services on its platform. It looks as though that strategy will continue in 2025.

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