DoorDash Inc. announced a deal to acquire its last-mile delivery rival Instacart in a deal valued at $17 billion.
The combined company would unite operations from two of the most active platforms in retail and grocery delivery services through a transaction subject to approval by regulators and Instacart shareholders. DoorDash expects to use a combination of cash, stock and debt to finance the deal. As a result, the acquisition would enable DoorDash to leverage Instacart’s technology and expertise.
Why DoorDash is acquiring Instacart
“Grocery is one of the hardest things to get right online,” said Tony Xu, co-founder and CEO of DoorDash, in the acquisition announcement. “Someone has to pick a ripe avocado, find a substitute you’d choose yourself, and get the ice cream to you before it melts.”
Xu praised the work that Instacart has done to date.
“Instacart has spent years learning to do that well for grocers, while DoorDash has built a delivery network and technology that local stores rely on every day,” he stated. “Together, we could give stores of every size more of those tools and unlock the potential of grocery delivery. It’s still early innings, but we know that when more people shop local, more dollars stay local.”
Online grocery sales in the U.S. grew by more than 20% year over year, increasing their share of total grocery spending, according to data tracked by the firm Brick Meets Click.
What comes next for Instacart
DoorDash and Instacart expect the deal to close near the end of 2027 or in the first half of 2028, the companies disclosed. After that, DoorDash expects to preserve the Instacart brand, along with its enterprise technology products and app. In the meantime, Instacart intends to continue to operate independently.
“Over the last 14 years, Instacart has transformed online grocery by helping retailers of all sizes compete and grow, and joining forces with DoorDash allows us to do even more,” said Chris Rogers, CEO of Instacart. “When our purpose-built grocery technology and trusted retailer and brand relationships are combined with DoorDash’s global consumer reach and logistics capabilities, we can create new opportunities for our retail and brand partners, offer an even better experience for customers and shoppers, and deliver compelling value for our shareholders.”
In the announcement, DoorDash noted that it could make 50,000 additional stores available to Instacart users through the deal, adding to almost 100,000 stores that already participate on Instacart’s platform.
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