DoorDash has proposed a $17 billion acquisition of Instacart, a deal that would significantly concentrate the grocery delivery market and strengthen DoorDash’s position in that area.
The company says Instacart would keep its name and app, its gig shoppers could keep working as they do now, and grocery partners could pick either platform. Instacart users would also gain access to another 50,000 stores through DoorDash’s network.
Instacart launched in 2012 and focuses on delivering groceries and convenience-store items across the U.S. and Canada.
According to its filings, roughly 600,000 independent-contractor shoppers handled 338 million orders last year, and the company is valued at about $14 billion.
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DoorDash, which started in San Francisco in 2013 as a restaurant delivery service, has since branched into areas like pet food and electronics.
It now operates in 40 countries, and last year its 9 million independent couriers fulfilled over 3 billion orders. Its market value is around $73 billion.
DoorDash entered grocery delivery in 2020, when pandemic-driven demand was climbing. Grocery chains were wary at first. Kroger teamed up with the company in 2022 but limited it to delivering flowers, sushi, and prepared meals from a small set of stores.
That relationship grew last fall, and DoorDash’s online marketplace now carries the complete inventory of all 2,700 Kroger stores in the U.S. Last month, DoorDash landed another major win by adding Costco delivery.
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DoorDash co-founder and CEO Tony Xu said the deal would pair Instacart’s grocery know-how with DoorDash’s strengths in logistics and delivery.
DoorDash’s expansion into groceries has cost Instacart ground. According to market research firm Consumer Edge, Instacart’s portion of U.S. delivery platform spending dropped from 26% to 18% over the past five years, while DoorDash climbed from 44% to 59%. Uber Eats stayed roughly level at just under 20%.
Apoorva Mehta, who founded Instacart and departed after its 2023 IPO, said Thursday that he and Tony Xu had discussed merging the two companies for years.
He said the business rationale kept resurfacing, since customers must sort out 21 meals a week and grocery and restaurant delivery at each address; part of that need, so serving people well means combining the two. Mehta added that shoppers would also gain from the deal through more ways to earn income.
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The transaction is expected to close by the end of 2027 or in early 2028, assuming Instacart shareholders and government regulators sign off. In early trading Thursday, DoorDash shares gained 6%, and Instacart shares were unchanged.
