DoorDash Inc. announced a deal to acquire its last-mile delivery rival Instacart in a deal valued at $17 billion.
The combined company would unite operations from two of the most active platforms in retail and grocery delivery services through a transaction subject to approval by regulators and Instacart shareholders. DoorDash expects to use a combination of cash, stock and debt to finance the deal. As a result, the acquisition would enable DoorDash to leverage Instacart’s technology and expertise.
“Grocery is one of the hardest things to get right online,” said Tony Xu, co-founder and CEO of DoorDash, in the acquisition announcement. “Someone has to pick a ripe avocado, find a substitute you’d choose yourself, and get the ice cream to you before it melts.”
“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,” he stated. “Together, we could give stores of every size more of those tools and unlock the potential of grocery delivery. It’s still early innings, but we know that when more people shop local, more dollars stay local.”
Online grocery sales in the U.S. grew by more than 20% year over year, increasing their share of total grocery spending, according to data tracked by the firm Brick Meets Click.
DoorDash and Instacart expect the deal to close near the end of 2027 or in the first half of 2028, the companies disclosed. After that, DoorDash expects to preserve the Instacart brand, along with its enterprise technology products and app.
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