DoorDash Buys Instacart For $17 Billion
The acquisition merges two major grocery delivery rivals, preserving the Instacart brand and contractor status while expanding store access for customers.
By Megan Parker ·
DoorDash announced on Wednesday that it will acquire Instacart for $17 billion. The transaction values Instacart at roughly 20% above its current market capitalization of $14 billion. The deal creates the largest grocery delivery platform in North America.
The agreement preserves the operational independence of the Instacart brand. The app and name will remain in use for customers. Shoppers who pick and pack orders for Instacart will retain their status as independent contractors. Existing retailers can choose to list their inventory on Instacart, DoorDash, or both platforms.
DoorDash customers will gain access to 50,000 additional stores currently covered by Instacart. This expansion increases the total store count available on DoorDash’s marketplace. The company stated that the merger combines Instacart’s grocery focus with DoorDash’s logistics network.
Instacart, founded in 2012, handles grocery and convenience store delivery in the United States and Canada. Its workforce of 600,000 independent contractors completed 338 million orders last year. DoorDash, founded in San Francisco in 2013, operates in 40 countries. It processed more than 3 billion orders last year using 9 million independent delivery workers.
DoorDash entered the grocery sector in 2020. Initial partnerships with large chains were limited in scope. The company expanded its Kroger partnership last fall to include the full inventory of all 2,700 U.S. Kroger stores. DoorDash also added Costco to its delivery roster last month.
Tony Xu, co-founder and CEO of DoorDash, described the challenge of online grocery in a statement. He noted that someone must pick a ripe avocado and deliver ice cream before it melts. Xu said the combination would provide tools for stores of every size.
Market share data from Consumer Edge shows a shift over the past five years. Instacart’s share of U.S. delivery platform spending fell from 26% to 18%. DoorDash’s share rose from 44% to 59% during the same period. Uber Eats maintained a share just under 20%. The deal leaves some existing partnerships unresolved, as Instacart delivers for Walmart while DoorDash ended its Walmart service in 2022.
Source: WHDH
More Business · Bad Service · Report a business · Got a Story?
