DoorDash announced Thursday that it has agreed to acquire grocery delivery specialist Instacart for $17 billion, creating a delivery powerhouse capable of fulfilling household supermarket lists alongside restaurant takeout orders.
Under the terms of the transaction, which was unanimously approved by Instacart’s board of directors, DoorDash will pay $65 per share, representing a 26 percent premium over Instacart’s closing stock price on Oct. 22. The deal will be financed with at least 75 percent cash, with Instacart stockholders having the option to receive cash, DoorDash equity, or a mixture of both, according to Yahoo Finance.
The transaction is expected to be completed in late 2027 or during the first half of 2028, provided it receives backing from Instacart shareholders and passes regulatory reviews.
Expanding into household grocery aisles
DoorDash, founded in 2013 and valued at roughly $73 billion, initially focused on restaurant deliveries before expanding into pet products, electronics, and supermarket items. The company completed more than three billion deliveries across 40 countries last year through a network of nine million gig workers. Instacart, which launched in 2012, fulfilled 338 million orders last year and maintains about 600,000 independent contractor shoppers across the U.S. and Canada, Fortune reported.
Instacart Chief Executive Chris Rogers said the combination would accelerate technical innovation and make online shopping more seamless for millions of households, the BBC reported. DoorDash co-founder and Chief Executive Tony Xu noted during an investor call that grocery fulfillment remains exceptionally complex, pointing out that Instacart has spent over a decade perfecting selection and substitution methods for grocers.
DoorDash said it will retain the Instacart brand, application, and technology products. Customers who currently subscribe to separate $9.99 monthly memberships for DashPass and Instacart+ will eventually be able to pay a single subscription fee. In addition, Instacart users will gain access to roughly 50,000 additional storefronts, expanding the service’s footprint from 100,000 to 150,000 retail locations, according to corporate statements.
Battling retail giants and antitrust watchdogs
The tie-up comes as major retail powerhouses increasingly challenge specialized delivery apps. According to research cited by Yahoo Finance from Wedbush, Walmart currently commands approximately 30.9 percent of the online grocery sector, while Amazon controls roughly 23.6 percent. Walmart has also steadily moved into restaurant drop-offs, partnering with brands such as Subway, Dunkin’, and Papa Johns to establish 2,400 restaurant delivery sites, Fortune reported.
Over the past five years, DoorDash’s share of U.S. delivery platform spending jumped from 44 percent to 59 percent, while Instacart’s share fell from 26 percent to 18 percent, according to Consumer Edge data reported by Fortune. Combining forces is designed to give regional supermarkets the digital infrastructure required to stand against national retail chains, executives said.
However, the proposed buyout faces substantial hurdles from antitrust regulators. Legal analysts and consumer advocates warned that consolidating the two biggest platform buyers of gig labor could limit work flexibility and give grocers fewer independent partners for digital storefronts.
New York City’s Department of Consumer and Worker Protection cautioned that the transaction continues a concerning pattern of corporate consolidation, reiterating that the city will enforce local delivery worker standards regardless of whether the merger closes, the BBC reported.
On Thursday, DoorDash shares gained more than five percent, while Instacart shares declined about 1.5 percent following the morning announcement.
