DoorDash to Buy Instacart for $17 Billion

DoorDash will acquire Instacart in a transaction valued at $17 billion.

The deal combines two of the largest platforms for grocery and convenience store delivery in the United States and Canada. The Instacart brand and its mobile application will remain available to customers. Shoppers who currently use Instacart can continue to place orders through that specific service. Supermarkets will have the option to partner with either Instacart or DoorDash. Instacart users will gain access to an additional 50,000 stores that are already part of the DoorDash network.

Instacart was founded in 2012 and specializes in grocery delivery. The company employs 600,000 independent contractor shoppers. Those workers completed 338 million orders last year according to company filings. Instacart currently has a market value of $14 billion. DoorDash was founded in San Francisco in 2013. It started by delivering restaurant meals but has expanded into pet food and electronics. The company operates in 40 countries. A network of 9 million independent drivers completed more than 3 billion orders for DoorDash last year. Its market value stands at $73 billion.

DoorDash entered the grocery delivery market in 2020 during the pandemic. Supermarkets were initially cautious about partnering with the San Francisco-based firm. Kroger began working with DoorDash in 2022 but limited the service to flowers sushi and prepared foods from a small number of stores. The partnership expanded last autumn. DoorDash now includes the full inventory from all 2,700 Kroger stores in the United States. The company added Costco delivery services last month.

Tony Xu, DoorDash co-founder and CEO, said the acquisition merges Instacart’s grocery expertise with DoorDash’s logistics capabilities. He noted that grocery delivery is difficult to execute online because staff must select ripe produce and keep frozen items cold. Xu stated that the combined company will provide tools to stores of all sizes to unlock the potential of grocery delivery.

DoorDash has taken market share from Instacart over the past five years. Instacart’s share of spending on delivery platforms in the U.S. dropped from 26 percent to 18 percent. DoorDash’s share rose from 44 percent to 59 percent during the same period. Uber Eats maintained a share of just under 20 percent. The deal leaves some existing alliances in question. Instacart provides delivery for Walmart, while DoorDash stopped offering Walmart deliveries in 2022.