DoorDash will acquire grocery-delivery firm Instacart in a $17bn deal, the companies announced Thursday, creating a delivery behemoth that will bring everything from restaurant meals to weekly grocery runs under one roof. DoorDash will pay $65 a share for Instacart, a 26% premium on the stock's closing price on October 22, the day before news of the potential merger first emerged. The deal is expected to be at least 75% cash and to close by the end of 2027 or in the first half of 2028.
Instacart shoppers will gain access to roughly 150,000 stores, up from 100,000 today, while DoorDash will push further beyond restaurants into general retail. DoorDash plans to keep Instacart's brand, app and technology intact, and the two services will continue operating independently until the deal closes.
"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," said DoorDash co-founder and chief executive Tony Xu. "Instacart has spent years learning to do that well for grocers, while DoorDash has built a delivery network and technology that local stores rely on every day." Instacart chief executive Chris Rogers called the deal a chance to "accelerate innovation across the grocery industry and make online grocery more seamless and affordable."
Analysts framed the tie-up as a sign of where delivery growth is actually heading. "Restaurant delivery is maturing, and growth now lies in more frequent, higher-value orders: weekly grocery shops, convenience items and retail," Morningstar analyst Martin Szumski told Reuters. The combination would be DoorDash's largest acquisition to date and could position it to better compete with Amazon in same-day retail delivery, though the deal may also draw antitrust scrutiny; a rival newsroom's separate look at the tie-up flagged similar questions about how regulators might view the combined company's reach.
New York City's Office of Labor Policy and Standards, which settled a $131.5m underpayment case against DoorDash just last month, was blunt about its concerns. "This proposed merger continues a troubling trend of mega-corporations consolidating," the office said in a statement. "Whether or not this merger proceeds, we will fully enforce delivery workers' rights."