DoorDash to Acquire Instacart for $17 Billion

DoorDash has agreed to purchase Instacart for 17 billion dollars, merging the two largest grocery delivery services in North America. The transaction will consolidate the market share of both companies under a single corporate structure.

The deal allows Instacart to retain its brand name and application. Shoppers who currently use Instacart will continue to place orders through that platform. Supermarkets will have the option to work with either DoorDash or Instacart for their delivery needs. DoorDash stated that Instacart customers will gain access to an additional 50,000 stores covered by the DoorDash network.

Instacart was founded in 2012 and focuses on grocery and convenience store deliveries in the United States and Canada. The company employed 600,000 independent contractor shoppers who completed 338 million orders last year. Documents filed by the company indicate that Instacart holds a market value of 14 billion dollars.

DoorDash, which started in San Francisco in 2013 as a restaurant delivery service, has since expanded into pet food and electronics. The company operates in 40 countries and completed over 3 billion orders last year using a network of 9 million independent drivers. DoorDash currently has a market value of 73 billion dollars.

Tony Xu, DoorDash co-founder and chief executive officer, said the acquisition combines Instacart's grocery expertise with DoorDash's logistics capabilities. Xu noted in a statement that grocery delivery requires precise handling, such as selecting a ripe avocado or keeping ice cream from melting. He added that the combined entity could provide more tools to stores of all sizes.

DoorDash entered the grocery sector in 2020 during a surge in demand. The company initially faced hesitation from major supermarket chains. Kroger partnered with DoorDash in 2022 but limited deliveries to flowers, sushi, and prepared foods from a small number of locations. The partnership expanded last fall to include full inventory from 2,700 Kroger stores in the United States. DoorDash also added Costco deliveries last month.

Market data from Consumer Edge shows Instacart's share of U.S. delivery platform spending fell from 26 percent to 18 percent over the past five years. During that same period, DoorDash's share rose from 44 percent to 59 percent. Uber Eats maintained a stable share just under 20 percent. It remains unclear how the merger will affect existing alliances, such as Instacart's delivery partnership with Walmart, which DoorDash ended in 2022.