Delivery giant DoorDash is buying to-your-door grocery service Instacart for $17 billion, the company announced Thursday.
The deal means users will be able to order groceries and items from other retailers via DoorDash and its delivery network.
The companies said Instacart customers can now shop at more than 50,000 additional stores on top of the nearly 100,000 stores on the Instacart platform today. DashPass and Instacart+ members will now also pay one membership fee instead of two.
DoorDash is expected to keep the Instacart brand and its technology. Until the transaction closes, DoorDash and Instacart will continue to operate as separate and independent companies.
“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,” Instacart CEO Chris Rogers said.
The deal represents the latest chapter of consolidation in the delivery industry. Last year, DoorDash bought United Kingdom-based Deliveroo, while Uber now owns Postmates and Delivery Hero.
DoorDash has emerged as the most successful stand-alone online delivery platform in America, commanding some two-thirds of all food delivery volumes as of 2024, according to Bloomberg data.
But over the past year, the company has seen its share price decline by approximately a third, largely due to rising costs.
Instacart, meanwhile, reached the pinnacle of its success during the Covid pandemic, when lockdowns sent millions of consumers to their phones to order grocery deliveries.
But the company’s stock has gone nowhere over the past two years, as Instacart struggled to find new paths to growth while facing increasing competition from Amazon and Walmart’s grocery delivery offerings.
While a merger would create cost savings by allowing the combined company to reduce its corporate workforce and split some expenses, it’s not clear how much more money there remains that can be squeezed out of delivery customers.
Americans who eat at home have begun to complain about the price of food delivery — and the pinch has only worsened this year amid soaring fuel costs, which have led to new fees and surcharges.
A recent debate about the cost of having a burrito delivered went viral, as social media users argued over whether $20 was a reasonable price to pay to have the Tex-Mex treat delivered.
Platforms such as DoorDash and Instacart have also faced legal scrutiny over how they treat those who make deliveries for their respective platforms. Last month, DoorDash settled with New York City regulators for $131.5 million to resolve charges it deprived workers of millions of dollars in tips.
“Simply put, we screwed up,” the San Francisco-based company said in a statement. “Our mistakes meant some Dashers were underpaid or paid late. While these mistakes weren’t intentional, that doesn’t make them okay.”
The proposed transaction was first reported by tech website The Information and The Wall Street Journal.
