DoorDash bids $17 billion for Instacart, promising cheaper memberships for shoppers

Shoppers who currently pay for two separate delivery subscriptions will soon have the option to pay for just one. DoorDash is offering 17 billion dollars to acquire Instacart, a move that aims to streamline costs for consumers while reshaping the grocery delivery market in the United States and Canada.

Under the proposed terms, the Instacart brand and app would remain operational. The company’s 600,000 independent contractor shoppers would continue fulfilling orders in the same manner. The most immediate financial change for customers involves membership fees. Those paying 9.99 dollars per month for DashPass and 9.99 dollars for Instacart+ could consolidate these into a single payment, according to DoorDash officials.

Instacart users would also gain access to 50,000 additional stores currently available on the DoorDash platform. Meanwhile, grocers would retain the ability to choose which delivery service handles their orders. Tony Xu, co-founder and CEO of DoorDash, stated that the merger is designed to help local retailers compete with larger national chains. He noted that Walmart holds a 21 percent share of grocery spending, while Costco and Amazon each hold 8 percent, according to data from Numerator.

Xu argued that major corporations have invested heavily in modern technology and fulfillment models, leaving smaller players at a disadvantage. He said the combination of DoorDash and Instacart would give every retailer a better chance to compete in the current market. This strategy also serves as a defense against rivals like Walmart, which has expanded its own restaurant delivery services. This summer, Walmart partnered with Subway to allow deliveries from 1,400 in-store locations, and has since added select locations for Dunkin and Papa Johns.

The size difference between the two companies is stark. DoorDash, founded in 2013, completed over 3 billion orders last year using a network of 9 million independent workers across 40 countries. Instacart, founded in 2012, fulfilled 338 million orders in the same period. DoorDash currently has a market value of 73 billion dollars. The company began delivering groceries in 2020 during a surge in pandemic-era demand, a sector where it has since gained ground on Instacart.

Market share data from Consumer Edge shows Instacart’s position has weakened over the last five years. Its share of spending on U.S. delivery platforms dropped from 26 percent to 18 percent. In that same period, DoorDash’s share grew from 44 percent to 59 percent. Uber Eats has maintained a steady share of just under 20 percent. DoorDash’s grocery expansion has been a key driver of this shift, particularly after the full inventory of all 2,700 U.S. Kroger stores was added to its marketplace last fall and the recent addition of Costco delivery.

Apoorva Mehta, who founded Instacart, said he and Xu had discussed a potential merger for years. Mehta left the company after its 2023 initial public offering but noted that the logic for combining the two services has always been clear. He stated that customers have 21 meals a week to address, and that merging grocery and restaurant delivery serves customers better by bringing the strengths of both platforms together. He also suggested the deal would create more earning opportunities for shoppers.

If approved by Instacart shareholders and government regulators, the deal is expected to finalize by the end of 2027 or in early 2028. DoorDash shares rose 6 percent in early trading on Thursday following the announcement. Instacart shares remained flat at the open.