DoorDash to Pay $17 Billion for Instacart in Grocery Delivery Merger

DoorDash is offering $17 billion to acquire Instacart, a transaction that would merge the two dominant players in the American grocery delivery market. The move signals a major consolidation in an industry where DoorDash has steadily eroded Instacart’s market position over the last five years.

Under the proposed terms, the Instacart brand and its application would remain operational. The 600,000 independent contractors who currently shop for Instacart would continue their existing roles. Consumers who currently pay $9.99 per month for both DashPass and Instacart+ memberships would pay a single fee. Instacart users would also gain access to the 50,000 additional stores available on the DoorDash platform.

Tony Xu, DoorDash’s co-founder and CEO, argued that the merger would allow smaller retailers to compete with corporate giants. Walmart holds a 21% share of U.S. grocery spending, while Costco and Amazon each hold 8%, according to Numerator. Xu stated on a conference call that large companies have invested heavily in technology and fast delivery models. He described the combination as a way to give every retailer a fighting chance in the modern era.

The deal positions the combined entity to counter Walmart, which has expanded its restaurant delivery service to include 2,400 locations. This includes 1,400 Subway stores and select Dunkin’ and Papa Johns outlets. Walmart now delivers these meals in under 30 minutes.

DoorDash, which operates in 40 countries, completed 3 billion orders last year through a network of 9 million delivery workers. Instacart fulfilled 338 million orders during the same period. DoorDash has a market value of $73 billion. The company began delivering groceries in 2020 and has since expanded partnerships, including a full inventory listing for all 2,700 U.S. Kroger stores and a new agreement with Costco last month.

Market research firm Consumer Edge reported that Instacart’s share of U.S. delivery platform spending fell from 26% to 18% over the past five years. During that same window, DoorDash’s share grew from 44% to 59%. Uber Eats maintained a share of just under 20%. Apoorva Mehta, who founded Instacart, said he and Xu had discussed combining the companies for years. He noted that customers need to plan 21 meals a week and that merging the two services would better serve that need.

The deal is expected to close by the end of 2027 or in early 2028, subject to approval by Instacart shareholders and government regulators. DoorDash shares rose 6% in early trading Thursday, while Instacart shares remained flat.