DoorDash acquiring Instacart for US$17B
DoorDash Inc. and Maplebear Inc., the registered corporate name of Instacart, have entered into a definitive agreement under which DoorDash will acquire Instacart for a total value of $65 for each Instacart share, or an equity value of approximately $17 billion.
The combined company is intended to allow local grocers to better compete with e-commerce giants such as Amazon and Walmart. It will offer grocers and retailers of every size DoorDash's delivery network and Instacart's grocery and fulfillment technology, in both apps and on stores' own websites, along with the advertising and AI tools each company has built.
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Both companies also said consumers will have more stores to choose from, more savings opportunities when they choose to shop with a local business, and faster delivery options, while Dashers and Instacart Shoppers will have more ways to earn.
“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 Tony Xu, co-founder and CEO of DoorDash, in a press release announcing the acquisition. “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. 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.”
“Over the last 14 years, Instacart has transformed online grocery by helping retailers of all sizes compete and grow, and joining forces with DoorDash allows us to do even more,” said Chris Rogers, CEO of Instacart, in the release. “When our purpose-built grocery technology and trusted retailer and brand relationships are combined with DoorDash’s global consumer reach and logistics capabilities, we can create new opportunities for our retail and brand partners, offer an even better experience for customers and shoppers, and deliver compelling value for our shareholders.”
DoorDash expects the following benefits from acquisition:
- More Choice for Consumers: Instacart customers will be able to shop at more than 50,000 additional stores, on top of the nearly 100,000 stores on the Instacart platform today.
- Two Memberships for the Price of One: DashPass and Instacart+ members will pay one membership fee instead of two, which will save them an estimated $100 million per year on membership fees alone.
- More Ways to Earn for Dashers and Shoppers: More orders for local businesses can create more earning opportunities, with more choice over when and how they earn, whether that’s grocery orders on a quiet day, restaurant orders at peak times, or both.
DoorDash ensures that local grocers can work with any delivery platform they choose to help them grow. Additionally, Instacart Shoppers can keep preferred features, including the flexibility to choose how much they work and the information they need to decide which batches to accept, and choose whether to take on DoorDash orders or keep shopping only on Instacart.
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When the deal closes, DoorDash is expected to keep Instacart’s brand, enterprise technology products and app. The Caper Cart business will not be part of the deal, as Instacart revealed this week that it is discontinuing the smart carts due to disappointing retail adoption.
DoorDash and Instacart will continue to operate as separate and independent companies until the transaction closes.
The deal is expected to close at the end of 2027 or the first half of 2028, subject to regulatory approvals. Instacart shareholders will receive $65 per share in cash, DoorDash stock or a mix of cash and DoorDash stock, subject to a specified cap for the amount of stock issued. This represents a 26% premium to Instacart’s closing share price on Oct. 22, the last trading day before media reports about a possible transaction.
A local commerce platform founded in 2013, San Francisco-based DoorDash is now present in more than 40 countries. Instacart, also based in San Francisco, is a grocery technology company partnering with more than 2,200 national, regional and local retail banners to deliver from nearly 100,000 stores across 15,000-plus cities in North America.
