DoorDash announced on Thursday that it has agreed to acquire rival Instacart for $17 billion. The transaction brings two dominant forces in on-demand delivery together, merging DoorDash’s established position in restaurant takeout with Instacart’s extensive network in grocery delivery.
Under the terms of the agreement, DoorDash will purchase Instacart for $65 per share. Both companies’ boards of directors have approved the deal. The acquisition is expected to close toward the end of 2027 or in the first half of 2028.
Combining Delivery Networks
The merger creates a unified platform for both food and grocery logistics. DoorDash plans to maintain Instacart’s brand identity, its enterprise technology products, and its consumer app. Until the transaction officially closes, the two companies will continue to operate as separate and independent entities.
Instacart CEO Chris Rogers highlighted the strategic fit in a press release. “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,” Rogers said. He added that combining Instacart’s grocery technology with DoorDash’s global consumer reach could create new opportunities for retail partners and improve the experience for customers and shoppers.
DoorDash CEO Tony Xu emphasized the operational complexities of grocery delivery. “Grocery is one of the hardest things to get right online,” Xu said. He noted that selecting ripe produce, finding suitable substitutes, and ensuring perishable items like ice cream arrive before melting requires specialized logistics. “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,” Xu explained.
Market Context and Future Plans
Instacart currently holds a market capitalization exceeding $13 billion. Its stock price has risen 25% year to date, suggesting the company viewed the current valuation as an opportune moment to sell ahead of intensifying competition in the grocery delivery sector. Bloomberg previously reported that Instacart had held talks with Uber but ultimately walked away from those discussions.
DoorDash stated that the deal could help grocers expand their own online ordering platforms and advertising businesses using Instacart’s technology. Additionally, grocers might utilize DoorDash’s fulfillment services to handle increased online order volumes and offer lower-cost delivery options. “Together, we could give stores of every size more of those tools and unlock the potential of grocery delivery,” Xu said. “It’s still early innings, but we know that when more people shop local, more dollars stay local.”
Source: TechCrunch
