DoorDash buys Instacart for $17 billion in grocery delivery deal

Summarised from 6 outlets · Updated 29 Oct, 12:42 · Archive

DoorDash has agreed to acquire Instacart for $17 billion, combining the two largest grocery delivery platforms in the United States.

DoorDash has announced it will acquire Instacart for $17 billion in an all-cash deal financed primarily through borrowing. The transaction values Instacart at $65 per share, representing roughly an 11 per cent premium over its closing price on Wednesday. Instacart's board of directors has unanimously approved the acquisition.

Both companies are headquartered in San Francisco. DoorDash, founded in 2013, began as a meal delivery service and has since expanded to include electronics, pet supplies and other items. It now operates in 40 countries and fulfilled over 3 billion orders last year through 9 million independent couriers. Instacart, established in 2012, specialises in grocery and convenience store delivery across the United States and Canada, with a network of 600,000 independent contractor shoppers that handled 338 million orders over the past year.

The acquisition will combine the two largest grocery delivery platforms in the United States. DoorDash entered the grocery sector in 2020 to meet increased demand during the pandemic. Its grocery business has since grown significantly, including a major expansion with Kroger in 2023 to cover all 2,700 Kroger locations in the United States, and a recent delivery arrangement with Costco.

According to DoorDash, both the Instacart app and brand will be preserved following the acquisition. Instacart shoppers will continue to use the app to place orders, and supermarkets and retailers will be able to partner with either service. Instacart customers will gain access to 50,000 additional stores currently served by DoorDash.

Tony Xu, co-founder and CEO of DoorDash, said in a statement that the deal brings together Instacart's grocery specialisation with DoorDash's delivery infrastructure and technology. 'Together, we could give stores of every size more of those tools and unlock the potential of grocery delivery,' Xu said.

The acquisition comes as Instacart's annual revenue growth has slowed amid stiff competition from Amazon and Walmart, both of which have expanded their same-day and next-day grocery delivery options. Rumours about the deal began circulating last week after reports that Instacart was exploring a potential sale. Both Uber and DoorDash were reported to be interested in acquiring the company.

Engadget noted that the deal could face antitrust scrutiny. Previous attempts by DoorDash to acquire Instacart in 2021 ended due to concerns over price and potential antitrust regulation.

How it is being reported

• DoorDash to buy Instacart for $17 billion in grocery delivery mega mergerInstacart customers will now have access to 50,000 additional stores covered by DoorDash, the company saidIndependent World · 29 Oct, 12:28
• DoorDash buys Instacart for $17B in massive food delivery mergerDoorDash on Thursday announced it has agreed to buy Instacart in a $17 deal, combining the nation’s top grocery delivery app with a massive restaurant takeout service.New York Post · 29 Oct, 12:27
• DoorDash acquires Instacart in $17 billion delivery service mergerThe deal combines the two largest grocery delivery platforms in the US.Engadget · 29 Oct, 12:24
• DoorDash gobbles up Instacart in $17 billion dealDoorDash's purchase of Instacart for $65 per share will unite two of the country's largest grocery and food-delivery companies.CBS News · 29 Oct, 12:10
• DoorDash to acquire Instacart for $17bnDeal further consolidates the fiercely competitive US food delivery marketFinancial Times · 29 Oct, 11:57
• DoorDash is acquiring Instacart for around $17 billionDoorDash has announced that it's buying Instacart in a deal valued at approximately $17 billion. The acquisition will give DoorDash a bigger presence in online grocery delivery via Instacart's established grocery marketplace and retailer partnerships. DoorDash, which started as a restaurant courier service, already has its own grocery delivery business, but that faces ongoing competition […]The Verge · 29 Oct, 11:56

In this story: DoorDash · Instacart · Amazon · Walmart · Uber · Kroger · Costco · Tony Xu

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