DoorDash-Instacart Deal: $17 Billion Bet on Grocery Delivery

A deal that redraws the online grocery map

DoorDash has agreed to buy Instacart, which trades as Maplebear, in a deal valued at about $17 billion. The purchase would bring the largest U.S. restaurant delivery company and the country's biggest online grocery platform under one owner.310 DoorDash will pay $65 per Instacart share. That is a 26% premium to Instacart's closing price on October 22, the last trading day before reports of a possible sale came out.18 At least 75% of the payment will be cash. Shareholders can take cash, DoorDash stock or a mix, and the stock portion is capped at a quarter of the total.1 Both boards have approved the deal. Shareholders holding about 19% of Instacart's stock have already agreed to vote for it.315

The companies do not expect the deal to close until the end of 2027 or the first half of 2028.15 That long timeline says a lot about the review ahead, and about how hard it is to merge the two companies that are reshaping how Americans buy groceries online.

How DoorDash got here

DoorDash did not suddenly decide grocery mattered. It spent the past year taking ground from Instacart directly. According to market researcher Consumer Edge, Instacart's share of spending on U.S. delivery platforms has fallen from 26% to 18% over five years. DoorDash's share rose from 44% to 59% over the same period, and Uber Eats stayed just under 20%.69 Much of that came from grocery partnerships. DoorDash began offering full grocery delivery from nearly 2,700 Kroger-owned stores last year, an announcement that sent Instacart's stock down. It also signed Family Dollar and dozens of other grocers.3 More recently it added Costco delivery.6

Seen that way, the deal looks less like two equals merging and more like the stronger player finishing a fight it was already winning. That is how this article reads it. When asked about timing, DoorDash CEO Tony Xu said the core business was doing well enough that "we felt like we had the space to do something offensive."3 DoorDash released better-than-expected third-quarter results at the same time. Revenue was $4.62 billion, and adjusted earnings per share of $1.06 beat analyst estimates.10 Orders rose 28% from a year earlier to 993 million, and gross order value rose 36% to $33.9 billion.7

Instacart is much smaller. It handled 90.3 million orders worth about $10.4 billion in its second quarter, on revenue of just over $1 billion.3 Its fall from the pandemic peak is clear. Private investors valued it at $39 billion during the grocery boom, and its market value now sits around $13 billion to $14 billion.37 TechCrunch suggested Instacart may have seen this as a good moment to sell before grocery delivery competition gets tougher.5

Why grocery is the prize

The logic is about order size and the skills each side lacks. The New York Times notes that grocery baskets are large and can be more profitable than a single restaurant meal, and that Instacart brings relationships with more than 2,200 retailers.3 Xu has argued that grocery is one of the hardest things to sell online. Someone has to pick a ripe avocado, choose a substitute the customer would accept, and deliver ice cream before it melts. Instacart has spent years learning that work.18

Instacart co-founder Apoorva Mehta, who left after earlier merger talks fell apart in 2021, said he and Xu kept coming back to the idea because the industrial logic was always clear.3 His version is simple: customers need about 21 meals a week, and grocery and restaurant delivery each cover part of that.9

Instacart also brings more than a delivery marketplace. It went public in 2023 pitching itself as a business that had moved beyond cash-burning delivery into advertising and software.3 DoorDash says grocers could use Instacart's technology to run their own websites and retail media networks, while relying on DoorDash's delivery network to handle more online orders.515 For many regional supermarket chains, that combination of software, ads and delivery could matter more than anything consumers see in the app.

What shoppers are promised

DoorDash has framed the deal around specific customer benefits. Instacart's brand and app will stay. Instacart customers would get access to more than 50,000 additional stores, on top of the nearly 100,000 already on the platform.712 DashPass and Instacart+ members would pay one membership fee instead of two, which DoorDash estimates would save $100 million a year.715 Instacart's roughly 600,000 independent-contractor shoppers could keep taking orders as before.9

The promises leave a lot unsaid. FOX's local coverage notes that it is unclear whether membership prices will rise once the deal closes.2 Combining two subscriptions is a nice feature, but it also ties customers more closely to one company, and the savings estimate assumes current prices hold. Partnerships are another open question. Instacart delivers from Walmart, while DoorDash stopped providing Walmart delivery in 2022, and it is not yet clear how that will be handled.6

The competition argument, both ways

Coverage splits most sharply on what "the market" is, and that question will likely decide the regulatory outcome.

The companies, and much of the business press, treat this as a defensive move against Walmart and Amazon.47 The numbers back that up on the grocery side. Numerator puts Walmart at 21% of U.S. grocery spending, with Costco and Amazon at 8% each.9 Walmart is also moving into DoorDash's territory: it partnered with Subway this summer, expanded to some Dunkin' and Papa Johns locations, and now lists 2,400 restaurant locations on its delivery platform.9 Xu presents the merger as giving "every retailer of every size the ability to compete."7

Critics define the market more narrowly. One cited figure, attributed to Startup Fortune, has Instacart controlling about 70% of U.S. third-party grocery delivery and DoorDash about 10%.17 Neither that number nor Consumer Edge's figures are a perfect measure. Even so, put next to Consumer Edge's broader delivery-spending data, they show why this definition matters so much. Wedbush analysts made the same point: third-party platforms are still a small slice of total grocery spending, but narrowing the market to online orders, or looking at grocers as enterprise customers, could make approval harder.10

Randall Sargent of Oliver Wyman said the two companies had been competing for consumers' spending and that less competition generally tends to hurt consumers.9 An antitrust critic quoted by the Associated Press warned that a combined DoorDash could cut off rivals, outdo them on targeting and logistics, or watch competitors' pricing in real time. He argued that an advantage big enough to build a monopoly will not stay consumer-friendly for long.9 The AP also noted that delivery workers could end up with fewer platforms to choose from.9

The regulatory path

The federal outlook appears easier than it was when the companies last talked. Those 2021 discussions ended partly over antitrust concerns.1517 Vanderbilt antitrust scholar Rebecca Haw Allensworth called the odds of a federal challenge "low but not negligible" given the current administration's lighter touch. She cautioned that states or private plaintiffs could still sue, especially since grocery prices have become a powerful political issue.3 CFRA Research said regulatory approval is the main risk and that the long closing window leaves the deal exposed to policy changes.17 Beyond the U.S. Hart-Scott-Rodino review, the deal also needs approvals in Canada and Israel.15

Local opposition has already started. New York City's Department of Consumer and Worker Protection, which recently reached a $131.5 million settlement with DoorDash over alleged underpayment of workers, called the merger part of a "troubling trend" of consolidation.18 DoorDash's pledge that grocers will not face exclusivity requirements seems aimed directly at concerns like these.115

The break fees show how both sides see the risk. Instacart would owe DoorDash $650 million in certain scenarios, while DoorDash would owe Instacart $1.25 billion.17 DoorDash is covering the cash with money on hand and new debt, backed by a 364-day bridge loan commitment from JPMorgan, and says it wants to keep its investment-grade credit ratings.15

What the market is saying

Investors are doubtful, though not dismissive. Reports on Instacart's early trading differed: Reuters said shares were flat around $58.50 before the market opened, while the Times reported a gain of nearly 5%.13 By midday, Instacart was trading around $57, well below the $65 offer.7 That gap suggests real uncertainty about whether the deal gets through regulators. DoorDash shares rose on the combined deal and earnings news, which looks like approval of the strategy even if approval of the deal itself is far off.110

The likeliest outcome is a long, political review that turns on how the market is defined. If regulators look at all grocery spending, where Walmart is the clear leader, the case for blocking the deal is weak. If they focus on online delivery platforms and the grocers who depend on them, it is much stronger. Either way, independent online grocery delivery as a separate category is close to its end. The bigger question is whether one platform handling both dinner and the weekly grocery run leaves shoppers and grocers better off, or simply with fewer options.