By Basant El-Faramawy
DoorDash announced Thursday it will acquire grocery delivery service Instacart for $17 billion, creating a combined platform that will let users order groceries and other retail items through DoorDash's network.
Deal Details
The companies said Instacart customers will gain access to more than 50,000 additional stores on top of the nearly 100,000 already on the Instacart platform. DashPass and Instacart+ members will pay a single membership fee instead of two. DoorDash plans to keep the Instacart brand and its technology, and both companies will operate independently until the transaction closes.
Executive Comment
“Over the last 14 years, Instacart has transformed online grocery by helping retailers of all sizes compete and grow, and joining forces with DoorDash allows us to do even more,” Instacart CEO Chris Rogers said.
Market Reaction
DoorDash shares rose more than 9% in pre-market trading Thursday. The acquisition marks the latest consolidation in the delivery industry, following DoorDash’s purchase of UK-based Deliveroo last year and Uber’s ownership of Postmates and Delivery Hero.
Industry Challenges
DoorDash has emerged as the leading stand-alone U.S. delivery platform, commanding about two-thirds of food delivery volume as of 2024, according to Bloomberg data. However, its share price has fallen roughly a third over the past year amid rising costs. Instacart’s growth stalled after a pandemic-driven surge, facing competition from Amazon and Walmart. Both companies have faced legal scrutiny over worker pay; last month DoorDash settled with New York City regulators for $131.5 million over tip violations.
