Food delivery giant DoorDash has agreed to buy grocery delivery platform Instacart in a deal worth about $17 billion, the two companies announced on Thursday.
DoorDash will pay $65 per Instacart share, according to TechCrunch. The boards of both companies have approved the deal, which brings together America’s leading restaurant delivery app and its biggest online grocery delivery service.
Why DoorDash Wants Instacart
DoorDash dominates restaurant takeout delivery in the United States, while Instacart has built a strong position in grocery delivery, working with supermarkets and local stores across North America.
“Grocery is one of the hardest things to get right online,” DoorDash co-founder and chief executive Tony Xu said. The companies said the deal is aimed at helping local stores compete with giant retailers such as Amazon and Walmart, which have been expanding their own fast delivery services.
Instacart CEO Chris Rogers said the company had spent 14 years helping retailers of all sizes compete and grow, and that joining forces with DoorDash would allow it to do even more.
Instacart Brand Will Stay
DoorDash plans to keep the Instacart brand, its app and its enterprise technology, which powers online shopping for many grocery chains. The two companies will continue to operate separately until the deal is completed.
The acquisition is not expected to close until late 2027 or the first half of 2028. It will need approval from regulators, who are likely to examine closely whether combining the two largest players in US delivery reduces competition.
Uber Talks Fell Through
Bloomberg had earlier reported that Instacart held talks with Uber, whose Uber Eats service competes with DoorDash, but those discussions did not lead to a deal. Reports of DoorDash’s interest first emerged earlier this week.
The announcement came as DoorDash also reported strong third-quarter results, with revenue up 34% to $4.6 billion, according to market reports.
What It Means for Shoppers and Couriers
For customers, the deal could eventually mean one app for both meals and groceries, with combined delivery networks offering faster service. However, consumer groups and regulators may worry about higher fees if competition shrinks. Couriers, many of whom already work for both platforms, could also see changes to how jobs are assigned and paid.
Sources: TechCrunch, ABC News, CNN, Bloomberg via BNN Bloomberg. Image: Wikimedia Commons (file photo).