DoorDash announced on Thursday, October 29 that it will acquire Instacart, a grocery delivery platform, for approximately $17 billion. DoorDash, primarily known for restaurant food delivery, will pay $65 per Instacart share, a 26% premium over the stock's closing price on October 22. The transaction structure includes 75% cash, with Instacart stockholders able to choose cash, DoorDash stock, or a combination of both. Instacart's board of directors unanimously approved the deal.
The acquisition combines two major hyperlocal delivery services as both face intensifying competition from larger retailers. Walmart currently holds roughly 30.9% of the online grocery market, while Amazon holds approximately 23.6%, according to analyst firm Wedbush. DoorDash CEO Tony Xu said in a statement that the combination would leverage Instacart's grocery expertise and DoorDash's delivery network and store technology. "Grocery is one of the hardest things to get right online," Xu said. "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."
Under the deal terms, Instacart customers will gain access to more than 50,000 additional stores beyond Instacart's existing 100,000-store marketplace. DashPass and Instacart Plus members will be able to pay a single membership fee instead of two. DoorDash said that Instacart's brand, enterprise technology products, and app will be preserved, keeping the services separate rather than merging them into a single platform. Local grocers will not face exclusivity requirements and will remain free to work with competing delivery services. Instacart shoppers and independent contractors will retain flexibility regarding working hours and order selection, including the choice to work exclusively with Instacart.
The transaction is subject to regulatory approval and other standard closing conditions. DoorDash said it expects the deal to close by the end of 2027 or the first half of 2028. Stock market reaction was mixed: DoorDash stock rose over 5% on the announcement, while Instacart stock fell 1.5%.
Wedbush analyst Ygal Arounian said the combination could provide competitive advantages. "A combination of strong restaurant delivery plus a marketplace including various grocers from Instacart can be a critical combination against Walmart and Amazon in particular, who continue to push in this market as well," Arounian said.
The acquisition faced early criticism from New York City officials. NYC Mayor Zohran Mamdani posted on X that "corporate consolidation means higher prices, harsher exploitation, and greater economic inequality for New Yorkers." Samuel A.A. Levine, the city's Department of Consumer and Worker Protection commissioner, said the deal "continues a troubling trend of mega-corporations consolidating while working to divide workers and consumers." He added that his department would "fully enforce delivery workers' rights" regardless of whether the merger proceeds. Mamdani referenced DoorDash's recent $131.5 million settlement with New York City, reached in September, over how the company paid delivery workers in the city. That settlement includes returning funds to workers.
DoorDash CEO Xu said the deal would lead to lower prices, faster delivery times, and increased earnings for delivery workers. The acquisition comes as all major delivery platforms—including Uber, which acquired Postmates, and Delivery Hero—have been expanding beyond their original business segments to diversify revenue and compete in the rapidly consolidating online grocery market.
