DoorDash is buying Instacart for $65 a share, an equity value of about $17 billion, in a deal that would bring the largest U.S. food delivery app together with the grocery service that partners with nearly 100,000 stores. The price is a 26% premium to Instacart’s close on Oct. 22, the last trading day before reports of the talks surfaced.
The two companies announced the definitive agreement Thursday morning, alongside third-quarter results from both. At least 75% of the payment will be cash. Instacart holders can choose $65 in cash, 0.3372 DoorDash shares, or a mix of $48.75 in cash and 0.0843 shares, with stock capped at 25% of the total, per DoorDash’s filing with the SEC. Instacart’s board approved the deal unanimously, and holders of about 19% of its shares have agreed to vote for it.
WebProNews reported last week that Instacart had held early sale talks with Uber and DoorDash.
A long wait for regulators
Closing is more than a year away. DoorDash expects the deal to wrap up at the end of 2027 or in the first half of 2028, pending an Instacart shareholder vote, the Hart-Scott-Rodino antitrust waiting period and approvals in Canada and Israel. DoorDash will pay with cash on hand and new debt, backed by a 364-day senior unsecured bridge loan commitment from JPMorgan Chase Bank, and it is aiming for a capital structure that keeps its investment-grade ratings.
DoorDash handled about two-thirds of U.S. food delivery volume as of 2024, NBC News reported, citing Bloomberg data, while Instacart has been fighting grocery delivery pressure from Amazon and Walmart.
DoorDash’s case: scale for the warehouse
DoorDash was blunt about its own grocery business in the shareholder letter it released with earnings. “We’ve made meaningful progress over the past five years at DoorDash, significantly improving logistics quality for grocery delivery, but as we’ve said many times, the product still isn’t there,” the company wrote. “Consumers are still asked to pay a premium for imperfect delivery.”
Its fix runs through inventory it manages itself. DoorDash’s DashMart sites hit 99%+ fulfillment accuracy and deliver more than 10 minutes faster on average, because the warehouse is set up for delivery rather than in-store shopping, the letter says. But warehousing is a fixed-cost business, and Instacart’s order volume would help spread that cost. The company sees a multi-year path to $500 million or more in annual synergies, net of investments. It plans to reinvest more than all of those savings in the first year after closing and expects positive net synergies from year two.
Instacart also sells software to grocers. It works with more than 2,200 retail banners, and its Enterprise platform and Instacart Ads cover e-commerce, fulfillment, in-store technology, AI offerings and advertising. The deal announcement says DoorDash expects to keep the Instacart brand, app and enterprise technology products after closing. Instacart customers could shop at more than 50,000 additional stores, and members of DashPass and Instacart+ would pay one fee instead of two, which DoorDash estimates would save them $100 million a year.
“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,” DoorDash co-founder and CEO Tony Xu said.
“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 added.
Both sides arrive with growing numbers
DoorDash’s third-quarter revenue rose 34% to $4.6 billion on 993 million orders, and net income nearly doubled to $466 million. Some of that growth came from Deliveroo, the U.K. delivery company DoorDash bought last year; without it, revenue rose 23%. Instacart’s results showed gross transaction value up 15% to $10.53 billion on 91.4 million orders, with advertising and other revenue up 23% to $331 million.
Instacart has canceled the earnings call it had set for Nov. 5, suspended its financial guidance and withdrawn its long-term targets while the deal is pending.
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