DoorDash has reached an agreement to buy grocery delivery provider Instacart for $17 billion. The transaction is scheduled to close between late 2027 and mid-2028.
DoorDash announced on Thursday that it has agreed to acquire rival delivery service Instacart for $17 billion. The offer values Instacart at $65 per share, representing a premium of roughly 26% over the stock’s closing price on October 22, according to Fox Business. The governing boards of both companies have approved the purchase. Following the announcement on Thursday, DoorDash shares gained more than 9% in pre-market trading, and the transaction was first reported by The Information and The Wall Street Journal.
Changes planned for shoppers and retailers
DoorDash plans to keep Instacart’s app, brand and enterprise software operational, TechCrunch reported. Both companies will operate as separate businesses until the transaction formally closes. Once combined, customers subscribed to DashPass and Instacart+ will pay a single membership fee instead of two separate charges, NBC News reported. Shoppers using Instacart will also be able to order from more than 50,000 additional stores beyond the nearly 100,000 stores currently active on the service.
Under the combined business model, DoorDash said grocery stores will be able to expand online ordering platforms and advertising operations using Instacart software. Grocers can also tap DoorDash’s logistics network to manage deliveries at lower costs. Instacart CEO Chris Rogers said, “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.” DoorDash CEO Tony Xu noted the challenges of the sector, stating, “Grocery is one of the hardest things to get right online.”
Market competition and financial pressures
The deal brings together two companies navigating shifting business conditions. DoorDash stands as the most successful stand-alone delivery app in the United States, controlling about two-thirds of all food delivery volumes as of 2024, according to Bloomberg data. Even with that market share, DoorDash saw its stock price slide by about one-third over the past year because of rising operating expenses.
Instacart experienced rapid growth during Covid-19 pandemic lockdowns as millions of customers ordered groceries online, but its stock remained flat over the past two years. The grocery platform faced increasing rivalry from Amazon and Walmart delivery services. Before striking the deal with DoorDash, Instacart discussed a deal with Uber before walking away from those talks. Instacart currently holds a market capitalization above $13 billion, with its stock up 25% year to date. Both companies have also encountered regulatory challenges regarding couriers. Last month, San Francisco-based DoorDash agreed to a $131.5 million settlement with New York City regulators over claims that it deprived workers of millions of dollars in tips.
Waves of consolidation across delivery apps
The buyout reflects wider consolidation across the app delivery market as restaurant order volume matures. In previous deals, Just Eat Takeaway acquired Grubhub for $7.3 billion, and Uber bought Postmates in 2020 before reaching a $15 billion deal for Delivery Hero earlier this year. DoorDash bought Wolt and also purchased United Kingdom delivery platform Deliveroo in 2025.
The companies expect cost savings by trimming their corporate workforce and combining overlapping expenses. However, delivery services are contending with customer resistance to delivery charges. High fuel costs linked to disruptions from the war in Iran have caused platforms to introduce extra fees and surcharges, prompting social media debates such as a viral dispute over a $20 order for a single delivered burrito.
What happens next
The companies expect the transaction to close toward the end of 2027 or during the first half of 2028. Before the deal concludes, Instacart plans to streamline its operations. In a regulatory filing on Monday, Instacart announced it will shut down its Caper Cart smart shopping-cart business by the end of the second quarter of 2027. Instacart said it expects that shutdown to generate between $55 million and $80 million in pre-tax charges.
