DoorDash seeks $17 billion Instacart purchase

DoorDash is proposing a $17 billion acquisition of Instacart. The move would merge the two primary rivals in the North American grocery delivery market.

Under the terms of the offer, the Instacart brand name and mobile application would remain operational. The company stated that Instacart’s 600,000 independent contractor shoppers would continue fulfilling orders under their existing arrangements.

Current subscribers paying $9.99 monthly for both DashPass and Instacart+ memberships would consolidate their payments into a single fee. Instacart customers would also gain access to the 50,000 stores already listed on the DoorDash platform.

Grocers would retain the option to use either platform for delivery services. Tony Xu, co-founder and CEO of DoorDash, argued that the merger would help local retailers compete against industry giants. According to Numerator, Walmart holds 21% of the U.S. grocery spending market, while Costco and Amazon each hold 8%.

Xu stated during a Thursday investor call that large companies have invested heavily in technology and fulfillment models. He said the combination would give every retailer a chance to compete in the modern era.

The deal would also serve as a defensive measure against competitors like Walmart. Walmart partnered with Subway this past summer to offer delivery from 1,400 in-store locations. The retailer has since expanded its platform to include select Dunkin’ and Papa Johns locations, reaching a total of 2,400 restaurant sites.

DoorDash, founded in 2013 in San Francisco, completed more than 3 billion orders last year using a network of 9 million independent workers. It operates in 40 countries and has a market value of $73 billion. Instacart, founded in 2012, fulfilled 338 million orders last year. Market research from Consumer Edge shows Instacart’s share of U.S. delivery platform spending fell from 26% to 18% over the past five years, while DoorDash’s share rose from 44% to 59%.

Apoorva Mehta, Instacart’s founder who departed after the 2023 initial public offering, said he and Xu had discussed a merger for years. Mehta noted that the industrial logic has always been clear because groceries and restaurant delivery solve different parts of the same problem. The transaction is expected to close by the end of 2027 or in early 2028, pending approval from shareholders and government regulators. DoorDash shares rose 6% in early trading Thursday, while Instacart shares remained flat.