A $17 million acquisition deal awaits regulatory approval to merge the country’s largest restaurant delivery platform with the largest online grocery delivery service.
DoorDash and Instacart have approval from their respective boards. DoorDash acquired British rival Deliveroo last year for $3.9 billion and, in 2022, closed a $8 billion deal with Finnish food-delivery company Wolt. The Instacart deal is DoorDash’s biggest so far.
“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.
“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,” Xu said.
Both companies are headquartered in San Francisco; Instacart went public in 2023, and DoorDash in 2020. As a combined firm, DoorDash and Instacart would dominate U.S. restaurant and grocery delivery. The combined company will offer DoorDash’s delivery network and Instacart’s grocery and fulfillment technology to grocers and retailers of every size, in both apps and on stores’ own websites, along with the advertising and AI tools each company has built, according to a DoorDash press release.
Under the agreement, Instacart shareholders would receive $65 per share, mostly in cash, 11 percent above the company’s closing price on Wednesday, Oct. 28.
“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, Instacart CEO.
“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. Together, we can accelerate innovation across the grocery industry and make online grocery more seamless and affordable for the millions of households we serve,” Rogers said.
Co-founded in 2013 by Tony Xu (chairman and CEO), Andy Fang (chief technology officer, head of LaunchPad, member board of directors), Stanley Tang, chief product officer, and Evan Moore, as PaloAltoDelivery.com, DoorDash has an estimated market share of roughly 56% to 67%.
Following closing, DoorDash is expected to keep Instacart’s brand, enterprise technology products, and app. Until the transaction closes, DoorDash and Instacart will continue to operate as separate and independent companies.