DoorDash to Buy Instacart for $17 Billion, Expanding Grocery Scale

By Nathan Brooks

DoorDash said it will buy Instacart for $17 billion, adding a 600,000-shopper grocery network to a company that completed more than 3 billion orders last year.

Instacart’s reported $14 billion market value puts the purchase price $3 billion, or about 21%, above its current valuation. DoorDash’s reported market value is $73 billion, giving the buyer greater financial scale than the target.

What changes for customers, shoppers and grocers?

DoorDash said the Instacart brand name and app will remain. Instacart shoppers will continue fulfilling Instacart orders, and grocers can choose to work with Instacart or DoorDash.

Instacart customers will gain access to 50,000 additional stores covered by DoorDash, according to DoorDash. For customers, the practical change is a larger store network while the existing Instacart app remains in place.

Tony Xu, co-founder and CEO of DoorDash, said the acquisition combines Instacart’s grocery expertise with DoorDash’s logistics and delivery capabilities. He put the case for the deal in operational terms:

“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.”

Xu’s statement puts the deal’s operational logic in plain terms: the work requires judgment about produce, substitutions and temperature-sensitive delivery. Instacart brings grocery experience; DoorDash brings logistics and delivery scale.

Scale favors DoorDash

Instacart was founded in 2012 and specializes in grocery and convenience-store delivery in the US and Canada. According to Instacart’s company filings, 600,000 independent-contractor shoppers completed 338 million orders last year.

DoorDash was founded in San Francisco in 2013. It started in restaurant delivery, then expanded into pet food and electronics.

DoorDash operates in 40 countries and uses a network of 9 million independent delivery workers. The company completed more than 3 billion orders last year, giving the combined operation a delivery footprint far wider than Instacart’s US-and-Canada grocery business.

Put side by side, DoorDash completed nearly nine times as many total orders as Instacart last year. Its 9 million-worker network is listed at 15 times the size of Instacart’s 600,000 shopper base, although the announcement does not quantify any overlap.

The market-share gap

Consumer Edge’s data show that Instacart entered the deal from a weaker market position. Five years ago, Instacart held 26% of spending on US delivery platforms; that share has fallen to 18%.

DoorDash’s share rose from 44% to 59% over the same period. Uber Eats’ share held steady at just under 20%, according to Consumer Edge.

Instacart lost eight percentage points while DoorDash gained 15. The divergence shows how US delivery spending shifted toward DoorDash and away from Instacart over those five years.

From cautious grocers to full Kroger inventory

DoorDash entered grocery delivery in 2020 as pandemic-era demand surged. Grocers initially remained cautious toward the service.

Kroger, one of the nation’s largest grocery chains, partnered with the San Francisco company in 2022. Initially, DoorDash delivered only flowers, sushi and prepared meals from a limited number of Kroger stores.

The partnership expanded last fall. DoorDash now lists the full inventory of all 2,700 US Kroger stores in its online marketplace.

Last month, DoorDash added Costco delivery. The progression from a narrow menu at a limited store set to full Kroger inventories shows grocers opening more of their catalogues to DoorDash.

The unresolved overlap

It remains unclear how the acquisition will affect some partnerships. Instacart offers delivery from Walmart, while DoorDash stopped providing Walmart delivery in 2022.

DoorDash did not explain how it would resolve that overlap for retailers served by both platforms. Its promise that grocers can choose Instacart or DoorDash leaves the operating terms unsettled.

The next test is operational: whether DoorDash can widen grocery choice without disrupting retailer relationships, and whether the combined platform can arrest Instacart’s eight-point share decline.