$17 Billion Acquisition Countdown: DoorDash (DASH.US) Plans to Acquire Instacart to Enter the Home Shopping Battlefield, Official Announcement as Early as Thursday
DoorDash's core intention in acquiring Instacart is to extend the user access and delivery network established through food delivery to the larger-scale household supermarket shopping scenario. The deal originated from Instacart exploring a sale and contacting potential buyers such as Uber and DoorDash. By October 26, multiple media outlets reported both parties had entered deep negotiations, with the potential transaction valued at approximately $17 billion.
According to The Financial Associated Press, some media outlets, citing sources familiar with the matter, reported that DoorDash (DASH.US) may announce its acquisition of Instacart as early as Thursday morning Eastern Time. Speculation about this deal has heated up since last week, when The Information reported that Instacart was exploring a sale and had approached companies like Uber and DoorDash. On Monday, several media outlets reported that DoorDash was engaged in deep negotiations to acquire Instacart, a deal that may value Instacart at around $17 billion.
In after-hours U.S. trading on Wednesday, Instacart's share price rose about 4%, while DoorDash's stock fell less than 1%. Instacart declined to comment. DoorDash's representatives did not immediately respond to media requests for comment.
Acquiring Instacart would expand DoorDash’s footprint in the online grocery delivery market. Originally focused on restaurant delivery, DoorDash has since brought more retailers—including Sephora, Macy’s, Staples, and Anthropologie—onto its platform. Following an announcement of cooperation with Kroger last year, DoorDash has recently added an increasing number of regional grocery retailers to its portfolio.
Instacart went public in 2023 and was once one of the biggest beneficiaries of the surge in grocery delivery demand spurred by the pandemic, but has since struggled to sustain this growth momentum. In December, Instacart agreed to pay $60 million to settle with the U.S. Federal Trade Commission over charges including misleading users with false advertising and engaging in “illegal subscription enrollment” practices.
The service also faces mounting competition from companies like Amazon and Walmart. After slowing the expansion of its brick-and-mortar grocery business, Amazon has ramped up its online grocery operations, leveraging its vast fulfillment network to speed up the delivery of household essentials, pantry staples, and perishables.
Both Amazon and Walmart have further rolled out same-day and next-day services, posing a threat to Instacart’s on-demand delivery model.
Analysts have pointed out that, given the overlapping businesses of the two companies, a potential merger between Instacart and DoorDash could trigger antitrust scrutiny.
Wedbush analysts wrote in a research report on Monday that while third-party delivery platforms “still account for a relatively small portion of total grocery spending, approval could become more difficult if the online market is looked at more narrowly or viewed from the perspective of grocery retailers as enterprise customers.”
$17 Billion M&A Deal Brewing: DoorDash Competes for the Household Shopping Gateway
The core intention behind DoorDash’s plan to acquire Instacart is to further leverage its user base and delivery network built from restaurant takeout, extending into the much larger household grocery shopping segment. The transaction originated when Instacart explored a sale and approached potential buyers like Uber and DoorDash; by October 26th, several outlets reported the two sides were in advanced negotiations, with the potential deal valued at approximately $17 billion.
The core strategic logic behind DoorDash’s determined pursuit of Instacart lies in using its restaurant delivery user gateway and logistics network to deepen its presence in the online supermarket “select, pick & one-click delivery” model, while also expanding opportunities for retail tech services and ad monetization.
Soon afterward, media cited sources saying the deal could be announced as early as Thursday, October 29th US time, but this remains an expectation rather than confirmation a deal is signed or completed.
Post-market moves saw Instacart up by around 4% and DoorDash down less than 1%, reflecting market participants beginning to price in acquisition premiums for the target and potential acquisition costs and integration responsibilities for the buyer. Meanwhile, the competitive landscape is clear: Amazon and Walmart continue to strengthen same-day and next-day delivery, vying for consumer demand for daily groceries and household goods, prompting independent delivery platforms to seek greater scale and service depth.
One Ties to Local Consumption, One Deeply Engaged in Supermarket Operations: It’s More Than Just Delivery Orders Being Bought
DoorDash’s main business is a local commerce platform with on-demand delivery: consumers purchase food, groceries, and other retail goods via the platform; the company connects merchants and couriers, earning from merchant commissions, consumer service fees, DashPass memberships, and advertisements, while also providing merchants with proprietary ordering, delivery, and business management tools.
Instacart, meanwhile, is more deeply embedded in grocery retail operations; its business includes the consumer-facing supermarket shopping platform (Instacart Marketplace), an enterprise platform (Instacart Enterprise) providing online store and fulfillment solutions for retailers, and an advertising business (Instacart Ads) for consumer brands and retailers alike.
Grocery orders involve large numbers of SKUs, substitution for out-of-stocks, fresh produce selection, and product matching of varying specs, requiring different operations from restaurant takeout; thus, DoorDash is interested not just in Instacart’s consumer and retailer partnerships, but also its product data, picking and fulfillment expertise, and retail tech. Advertising is a key highlight: Instacart revealed that 2025 ad and other revenues will exceed $1 billion, demonstrating it has developed significant monetization avenues beyond delivery services.
If the deal is completed, DoorDash could simultaneously expand its use cases, deepen merchant services, and strengthen retail ad capabilities. Restaurant users might be guided to grocery shopping, and Instacart’s household users could increase local consumption; if membership benefits, customer acquisition, and fulfillment can be effectively integrated, the platform has the opportunity to boost user spending, lower repeat acquisition costs, and drive extra income from ad and merchant tools. However, these are post-merger synergies, and cannot yet be simply counted as profit growth based solely on combined order volumes.
Regulatory approval also affects the deal’s value: under Wedbush’s analysis, even though third-party delivery accounts for only a small share of total grocery spending, if regulators focus on the narrower online delivery market, or judge the deal from the perspective of grocery retailers’ choices of tech and fulfillment providers, concerns over concentration could arise; the true core of the deal is whether DoorDash can translate a larger consumer funnel into long-term profits, not just become a bigger delivery platform.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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