DoorDash plans to buy Instacart for $17 billion, creating a delivery powerhouse

• DoorDash has agreed to acquire Instacart.
• The $17 billion deal is expected to close at the end of 2027 or in the first half of 2028.
• It will give DoorDash a leg up over Uber and Amazon in the world of grocery delivery.

Two of the biggest names in food delivery are coming together.

DoorDash plans to acquire Instacart in a deal worth about $17 billion, the companies said Thursday. The deal is expected to close at the end of 2027 or in the first half of 2028.

The acquisition would combine DoorDash’s historical dominance in restaurant delivery with Instacart’s roster of grocery partnerships, creating one company to deliver much of customers’ weekly dining needs.

“Together, we can accelerate innovation across the grocery industry and make online grocery more seamless and affordable for the millions of households we serve,” said Chris Rogers, the CEO of Instacart.

This isn’t the first time that DoorDash and Instacart have considered a deal, Apoorva Mehta, Instacart’s founder, said in a statement Thursday.

“Tony and I have explored bringing Instacart and DoorDash together on and off over the years,” he said.

“We kept coming back to it because the industrial logic has always been clear,” Mehta added, referring to the opportunity to sell customers more of the 21 meals they eat each week.

DoorDash has been growing its grocery business since the pandemic, which pushed many shoppers out of stores and toward delivery services as they stayed home more. Since then, the company has partnered with dozens of grocers, creating a selection that rivals Amazon’s with less infrastructure, CEO Tony Xu said earlier this year.

Instacart, meanwhile, has focused on grocery delivery since its inception in 2012. The startup delivered orders from Whole Foods before Amazon bought the chain in 2017. It now works with thousands of retailers in North America and sells retail technology, from digital price tags to smart shopping carts.

In a joint announcement, the companies said the deal would mean Instacart customers could shop at more than 50,000 additional stores, and that DashPass and Instacart+ members would pay one membership fee instead of two.

The deal, which will be at least 75% cash, values Instacart at $65.00 per share, representing a 26% premium over its closing price on October 22.

Taking on Amazon and Uber

The combined company will be a more formidable presence in the competitive grocery delivery industry.

Amazon has spent years trying to increase sales in its grocery business, including a rollout of same-day perishable food deliveries to more parts of the US over the past year. And Walmart is also building its own delivery infrastructure, including its own network of gig-worker couriers and expanding into restaurant delivery.

Combining DoorDash and Instacart would give other grocers a better shot at taking on companies like Amazon and Walmart, DoorDash said.

“A lot of what we talk about with grocers is: How can we together help them compete against the largest companies in the world?” DoorDash CEO Tony Xu said on a call Thursday.

Uber has also grown its restaurant and grocery delivery business through Uber Eats. The company has recently moved deeper into premium ride-hailing options, such as black car services, as well as travel through a hotel-booking partnership with Expedia.

Both DoorDash and Instacart have relied on gig workers to pick orders and make deliveries. As independent contractors, most don’t receive many of the same benefits as full-time workers, such as health insurance or contributions to retirement accounts.

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