The Maze: DoorDash, best known for restaurant delivery, has agreed to buy grocery delivery and technology company Instacart for about $17 billion. The proposed deal would put more of US grocers’ online ordering, advertising and delivery services under one owner. It has not closed, and the companies remain independent.
Source: Uber / Instacart. Historical May 2024 interface illustration: Instacart’s Restaurants tab linked to Uber Eats delivery. This is not the proposed DoorDash integration or proof of current offers.
The Details:
The price buys a business, not instant integration. The agreement values Instacart’s shares at $65 each. At least 75% of the total payment will be cash, with DoorDash stock capped at 25%. DoorDash expects to use existing cash and borrowing. Closing is expected in late 2027 or the first half of 2028. Instacart shareholders must approve it, and regulatory conditions include US antitrust review and approvals in Canada and Israel. Those steps matter: a signed agreement gives grocers a prospective new supplier owner, not a new operating arrangement today.
The larger prize sits behind the grocery app. Instacart also supplies the technology retailers use to take orders on their own websites and sell advertising around shopping. DoorDash proposes combining those tools with its delivery and order-fulfillment capacity. In the quarter ended September 30, Instacart generated $1.095 billion in revenue and $147 million in net income. Its advertising and other revenue reached $331 million, up 23% from a year earlier. That is an existing revenue stream, rather than a hoped-for merger benefit. DoorDash would be acquiring relationships with grocers and brands alongside the delivery marketplace. The announcement does not disclose the final prices or data-access rules for those combined services.
The promised savings arrive with important qualifications. DoorDash expects to retain Instacart’s app, brand and business technology products. It says grocers will remain free to use other delivery platforms. It also proposes combining DashPass and Instacart+ membership payments, estimating $100 million in annual membership-fee savings. That is a company forecast about subscriptions, not evidence that grocery baskets or every delivery will cost less. Instacart CEO Chris Rogers separately told the people who pick and deliver its orders that accepting and delivering orders does not change immediately.
MarketMaze Take: For grocers, the consequential question is how many independent companies supply the tools needed to sell online. One owner could make ordering, advertising and delivery work better together. It could also make a retailer more dependent on that owner. DoorDash’s promise of platform choice addresses part of that tension.
Combining categories does not require combining companies. In May 2024, Uber and Instacart announced a US partnership that put restaurant ordering inside Instacart while Uber Eats handled restaurant deliveries. That history shows another route to offering groceries and meals together. It does not prove a partnership could deliver every benefit DoorDash now promises. The acquisition announcement does not establish what happens to that Uber relationship.
An open platform still needs a meaningful choice of suppliers. For retailers outside the US, the useful lesson is to examine dependence across ordering software, advertising and delivery together. Permission to use another courier does not by itself create an alternative to the whole bundle. Equally, common ownership does not prove higher fees. Future contracts and actual operating results will determine whether grocers gain affordable capabilities or lose bargaining room.
Sources: TechCrunch, DoorDash, Instacart, Instacart shopper letter, Uber
