DoorDash Offers $17 Billion For Instacart

DoorDash has offered to buy Instacart for $17 billion, a deal that would bring together two of the largest delivery networks operating in the United States and Canada. DoorDash said the Instacart brand name and app would continue, and Instacart shoppers would keep fulfilling orders as they do now.

Instacart, founded in 2012, employs 600,000 independent contractor shoppers who completed 338 million orders last year, according to company filings. The company's market value stands at $14 billion. DoorDash, founded in San Francisco in 2013, operates in 40 countries, completed more than 3 billion orders last year through a network of 9 million independent delivery workers, and holds a market value of $73 billion. Instacart customers would gain access to 50,000 additional stores covered by DoorDash.

DoorDash entered grocery delivery in 2020, and its early grocer partnerships were limited. Kroger partnered with the company in 2022 but initially allowed deliveries of only flowers, sushi and prepared meals from a small number of stores. That arrangement expanded last fall, and DoorDash now lists the full inventory of all 2,700 U.S. Kroger stores. DoorDash added Costco delivery last month.

Tony Xu, co-founder and CEO of DoorDash, said the acquisition would combine Instacart's grocery expertise with DoorDash's logistics and delivery capabilities. "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," Xu said in a statement. "Together, we could give stores of every size more of those tools and unlock the potential of grocery delivery."

Market share data from Consumer Edge, a market research company, shows DoorDash's position growing as Instacart's has declined. Five years ago, Instacart held 26% of spending on U.S. delivery platforms; that figure now stands at 18%. DoorDash's share rose from 44% to 59% over the same period, while Uber Eats held steady at just under 20%.

Some existing partnerships face an open question. Instacart currently offers delivery from Walmart, while DoorDash ended its Walmart delivery service in 2022. Grocers can choose to work with either company under the proposed arrangement.

Instacart shoppers are classified as independent contractors, as are DoorDash's 9 million delivery workers. The companies' order volumes and market values are drawn from company filings and market data cited in the announcement.