DoorDash has offered $17 billion to acquire Instacart, uniting two major delivery giants in a blockbuster cash-and-stock deal announced Thursday. The acquisition agreement, which values Instacart at $65 a share, aims to help local grocers compete while giving consumers expanded store access and other benefits.
DoorDash Offers $17 Billion in Cash and Stock for Instacart
DoorDash agreed on Thursday to acquire Instacart for about $17 billion, a transaction that would combine the nation’s dominant restaurant delivery network with its leading grocery-delivery platform. Under the terms of the agreement, DoorDash will pay $65 a share in cash and stock. That price represents an 11% premium over Instacart’s closing price on the prior Wednesday and roughly a 26% premium above its valuation on October 22, just before markets began buzzing about a potential sale.
The announcement arrived alongside DoorDash’s financial report for the third quarter, which showed revenue climbing to $4.62 billion and beating analyst expectations. Marketplace gross order value jumped 36% year over year to $33.9 billion, while total orders reached 993 million. Investors reacted swiftly in premarket trading, sending DoorDash shares up more than 8% as Instacart shares traded near the flatline.
Grocery is one of the hardest things to get right online. Someone has to pick a ripe avocado, find a substitute you’d choose yourself, and get the ice cream to you before it melts.
Tony Xu, co-founder and CEO of DoorDash
Tony Xu and Apoorva Mehta Detail the Industrial Logic Behind the Merger
Behind the negotiations lies a long-standing conversation between industry founders. Apoorva Mehta, who founded Instacart before stepping away after its 2023 initial public offering, revealed that he and DoorDash chief executive Tony Xu had explored combining the two companies for years. We kept coming back to it because the industrial logic has always been clear,
Mehta said, noting that grocery delivery and restaurant meals solve different parts of the consumer’s weekly routine.
Xu argued during an investor conference call that the consolidation is necessary to help independent grocers survive against dominant retail competitors. Walmart currently captures 21% of U.S. grocery spending, while Costco and Amazon each hold an 8% share, according to market research firm Numerator. Xu told investors that major retailers have pulled ahead by aggressively investing in technology stacks, rapid fulfillment, and new delivery models.
BREAKING: DoorDash just agreed to buy Instacart for $17 billion. Here's what that means for customers and shoppers. https://t.co/6QYfEDmvqB
That’s what this combination is really about, where DoorDash and Instacart can give every retailer a fighting chance at competing in the modern-day era.
Tony Xu, co-founder and CEO of DoorDash
Market Share Shifts and Regulatory Scrutiny Facing the Combined Companies
The agreement reflects a dramatic shift in market momentum over the past five years. Consumer Edge data shows that Instacart’s share of spending on U.S. delivery platforms dropped from 26% to 18%, while DoorDash’s share climbed from 44% to 59%. Uber Eats held steady at just under 20% during the same period. Both delivery platforms have faced mounting pressure from retail giants like Walmart and Amazon, which have expanded their own fast-delivery operations for household essentials and perishables.
Financial analysts suggest the merger will likely draw close antitrust inspection. Wedbush analysts noted in a research note that while third-party delivery services still account for a minority of total grocery consumption, examining the online marketplace through the lens of grocers as enterprise customers could make regulatory approvals more challenging.
What Changes for Shoppers, Subscriptions, and Supermarkets
Both companies confirmed that they will operate as separate entities until the merger is formally completed. Executives estimate that the transaction will close by late 2027 or early 2028, pending approval from Instacart shareholders and government regulators. Once finalized, DoorDash plans to maintain the Instacart brand, application, and enterprise technology products.
The corporate pairing promises several operational shifts for users and workers across the United States and Canada:
- Subscription savings: Consumers who currently pay separate monthly fees of $9.99 for DashPass and Instacart+ memberships will be able to pay a single fee instead of two.
- Expanded store access: Instacart customers will gain access to more than 50,000 additional stores currently available on DoorDash’s platform, adding to the nearly 100,000 stores already on Instacart.
- Shopper continuity: Instacart’s 600,000 independent contractor shoppers will continue fulfilling orders as they did before the buyout.
- Retailer flexibility: Supermarkets and local grocers will retain the option to choose either delivery platform to run their e-commerce storefronts.