DoorDash has agreed to acquire grocery delivery company Instacart for approximately $17 billion, combining two major US delivery platforms under one company. The agreement, announced on October 29, values Instacart at $65 per share and brings together DoorDash’s restaurant delivery network with Instacart’s grocery ordering and fulfillment technology.
According to DoorDash’s official announcement, the acquisition has received approval from both companies’ boards of directors. The $65-per-share offer represents a 26% premium over Instacart’s closing share price on October 22, before reports of a potential acquisition emerged.
DoorDash Plans to Retain Instacart’s Brand and Technology
DoorDash intends to retain Instacart’s brand, consumer app, and enterprise technology products following the acquisition. Both companies will continue operating independently until the transaction is completed.
The combined business would allow grocery retailers to use Instacart’s technology to operate their own online stores and advertising platforms while accessing DoorDash’s delivery network. DoorDash also expects its fulfillment services to help retailers handle more online orders and offer lower-cost delivery options.
DoorDash CEO Tony Xu said grocery delivery presents operational challenges, particularly when selecting fresh produce, finding suitable replacements, and transporting temperature-sensitive products. He said combining Instacart’s grocery technology with DoorDash’s logistics network could provide retailers with more tools to manage online orders.
Instacart CEO Chris Rogers said the agreement would combine the company’s existing retailer and brand relationships with DoorDash’s consumer reach and delivery capabilities. He added that the combination could provide additional services for retail partners, customers, and shoppers.
Acquisition Could Expand Grocery Delivery and Membership Services
DoorDash estimates that Instacart customers could gain access to more than 50,000 additional stores, beyond the nearly 100,000 locations already available through Instacart. The company also plans to combine DashPass and Instacart+ membership benefits under a single fee, potentially saving subscribers approximately $100 million annually.
DoorDash said grocery retailers would remain free to work with competing delivery providers. Instacart shoppers would also retain flexibility over their working arrangements, including whether to accept DoorDash orders.
Before the agreement, Instacart had a market capitalization exceeding $13 billion, with its shares up approximately 25% year to date. Bloomberg previously reported that Instacart had held acquisition discussions with Uber but later ended those negotiations.
Acquisition Expected to Close by First Half of 2028
The transaction will consist of at least 75% cash, with Instacart shareholders able to elect cash, DoorDash shares, or a combination of both, subject to certain limits.
DoorDash expects the acquisition to close in late 2027 or during the first half of 2028. Completion remains subject to Instacart shareholder approval, regulatory clearance in the United States, Canada, and Israel, and other customary closing conditions.
Featured image credits: DoorDash
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