DoorDash Agrees to Buy Instacart

DoorDash agreed to buy Instacart, combining two major players in retail delivery. The companies said the deal will help retailer partners, large and small, reach customers with new technology.

DoorDash expects to keep Instacart's brand, enterprise technology products and app. Until the transaction closes, the two will keep operating separately.

The deal is expected to close at the end of 2027 or in the first half of 2028, the companies said Thursday. It values Instacart at $65 per share, a 26% premium to its closing stock price on October 22.

Terms

At least 75% of the aggregate consideration will be cash. Instacart stockholders can choose cash, DoorDash stock or a mix, subject to proration so that stock does not exceed 25% of the total. Instacart's board approved the agreement unanimously.

DoorDash has a market capitalization of about $78 billion, roughly five times Instacart's $14 billion, according to Yahoo Finance.

What DoorDash gets

DoorDash began as a restaurant delivery provider and moved into grocery and nonfood delivery in recent years. Instacart started in grocery e-commerce and later added in-store technology such as digital shelf labels and smart carts, plus a food-as-medicine initiative called Instacart Health.

The deal gives DoorDash Instacart's grocery partnerships, more than 600,000 delivery couriers, e-commerce capabilities and millions of users. It also brings a retail media business: Instacart's advertising and other revenue was $331 million in the third quarter, about 30% of its total.

DoorDash's third-quarter revenue of nearly $4.6 billion was roughly four times Instacart's. Both companies moved up their earnings releases. DoorDash held its call on Thursday, and Instacart cancelled its call.

Over the last three years both companies have posted year-over-year quarterly growth in orders and revenue. Both have also worked on grocery affordability: Instacart is pushing retailer partners to match their online prices with in-store prices, and DoorDash has rolled out tools that help shoppers find savings and see what a grocery bill will look like.

DoorDash was founded in 2013 and Instacart in 2012. Instacart also added restaurant and nonfood retailers as delivery partners. At Groceryshop in September, top executives at both companies said that addressing cost concerns in grocery e-commerce is becoming a pressing issue amid consumer price sensitivity.

DoorDash said the deal would give consumers more choice and savings in delivery and give couriers more ways to earn.

Source: Retail Dive