DASH will ultimately do more than deliver food.
Ultimately, we believe that DASH will have an advertising strategy like WMT, Instacart, GoPuff, and others. The WSJ recently ran an article talking about how Instacart now is making a push into selling online advertising, citing hiring veterans from Facebook and developing platforms for video and other services, aiming to tap a multibillion-dollar digital advertising business. Walmart said in August that its own ad business has nearly doubled from a year ago, and it looks to invest further. Kroger said its digital media arm is one of the fastest-growing parts of its overall business.
In late June, Instacart CEO and founder Apoorva Mehta apparently wanted to merge with DASH, but the talks fell apart, and he would soon be stepping down as Instacart’s CEO. In early July, Fidji Simo, an Instacart board member whom the company announced would replace Mehta as CEO. Ms. Simo suggested that her vision for powering growth at the company, including Pinterest-like features for sharing food inspiration, which she believed could extend customer engagement on the app. One of the biggest decisions she’ll need to make is to forge ahead with an initial public offering or look for a merger partner later this year. A DoorDash/Instacart tie-up would definitely see serious scrutiny and likely not pass the regulators, but cant DASH do the same thing at a lower cost?
The current app downloads don’t look good, with trends slowing significantly. That said, the current app down loads suggest Revenues growth of 40% versus the current estimate of 28%. This is down from 80% growth in 2Q21.
So it might be the right time to talk about DASH’S big growth opportunity, its advertising business in the next quarter. For DASH, consumer brands’ spending on digital advertising is projected to rise about 32% this year. According to eMarketer - brands are leaning more on websites and apps to reach consumers and less on traditional in-store deals and television spots. The WSJ cited that Instacart’s ad business generated about $300 million in revenue last year; it seeks to increase it to $1 billion by 2022.
DASH, like Instacart, has valuable information for retailers on orders placed through the respective platform, helping retailers build better relationships with shoppers, and consumers benefit from a cheaper, better shopping experience. This is similar to Kroger's data on how its customers shop in person and more information than online-focused ad platforms.
