DoorDash Tests Grocery Delivery With Walmart

(Bloomberg) -- DoorDash Inc. wants to be more than a meal-delivery service. The restaurant courier signed on to make fresh-food deliveries through a partnership with Walmart Inc., which is looking for ways to keep up with a heavy investment by Amazon.com Inc. in grocery delivery.

The world’s biggest retailer started using DoorDash software to offer grocery items to some customers who place orders through Walmart’s website and apps. The new service, which is only available in Atlanta to start, charges customers a $9.95 delivery fee on each order of at least $30 worth of goods. Customers can receive their purchases on the same day they order.

The market for grocery delivery has mainly been a race between Amazon and Instacart Inc., a heavily funded startup that has a delivery arrangement with Walmart-owned Sam’s Club. Last month, San Francisco-based DoorDash got a cash infusion of $535 million led by SoftBank Group Corp. The investment, which valued DoorDash at $1.4 billion, is being put to use on high-profile partnerships like the one with Walmart and a hiring spree, said Tony Xu, the startup’s co-founder and chief executive officer. This year, DoorDash expects to double engineering staff to 300 and sign additional retailers in the U.S. and Canada, he said.

Christopher Payne, DoorDash’s chief operating officer, runs a unit developing software that retailers can integrate into their own sites and apps. Walmart is an important test case. “Meal delivery is really a small sliver of what we’re working on,” Payne said.

Following Amazon’s $13.7 billion purchase of Whole Foods last year, Walmart has been ramping up its grocery-delivery strategy. In March, the company said it would deliver fresh fruits, produce and pantry staples from 800 stores before the end of the year. It also works with Uber Technologies Inc. and Postmates Inc. to deliver goods.

©2018 Bloomberg L.P.

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