DoorDash to buy Instacart for $17B in grocery delivery bet
What's the deal? DoorDash has agreed to acquire Instacart for $65.00 per share, an equity value of about $17 billion, the companies said on October 29. The consideration is at least 75% cash, with Instacart stockholders able to elect cash, DoorDash stock, or a combination. Both boards have approved the deal.
What's the endgame? The combination folds the US's dominant grocery delivery app into the company that controls most restaurant takeout orders. DoorDash brings a broad delivery network; Instacart adds relationships with more than 2,200 retailers plus grocery fulfilment, advertising, and AI tools. Instacart customers could shop at more than 50,000 additional stores, and DashPass and Instacart+ members would pay one membership fee instead of two.
Why now? Delivery platforms are chasing growth beyond maturing food delivery, moving deeper into grocery and retail. "Grocery is one of the hardest things to get right online," said Tony Xu, co-founder and CEO of DoorDash, adding that Instacart has spent years learning to do it well for grocers.
By the numbers: DoorDash completed 993 million orders in the third quarter, up 28% from a year earlier, with customers spending nearly $34 billion and revenue of $4.6 billion. DoorDash shares jumped nearly 7% on the results and the deal news. Instacart, formally Maplebear, was valued at $39 billion by private investors during the pandemic and went public in 2023; its market capitalisation is now around $14 billion.
What could go wrong? The deal faces shareholder and regulatory approvals and is not expected to close until late 2027 or the first half of 2028. New York City's Department of Consumer and Worker Protection said a potential merger continued a "troubling trend" of corporate consolidation. DoorDash pledged that local grocers could keep working with any delivery platform they choose.
The signal: The takeover — DoorDash's largest, surpassing its roughly $8 billion Wolt buyout and its Deliveroo deal — fits a wave of delivery-sector consolidation, including Uber's agreement to buy Delivery Hero for about $14.8 billion. As Amazon, Walmart, and Uber push into grocery delivery, the deal is a major bet on combining logistics with retailer software, with the promised efficiencies still unproven.
Read more: ir.doordash.com, Bloomberg, Reuters, The New York Times, Business Insider
Image credit: Generated with Gemini
