DoorDash (DASH.US) invests $17 billion to acquire Instacart to accelerate seizing the US grocery delivery market

The Zhitong Finance App learned that DoorDash (DASH.US)'s transaction to acquire Instacart has finally settled. DoorDash said in a statement on Thursday that it has agreed to buy Instacart at a valuation of around $17 billion. DoorDash will pay the consideration in cash plus shares at a price of $65 per share. This deal is the latest sign of continued consolidation in the increasingly intense delivery market.

Instacart was launched in 2023 and was one of the biggest beneficiaries of the surge in demand for grocery delivery services driven by the pandemic, but it has been difficult to maintain this growth since then. Meanwhile, as major competitors such as DoorDash and Uber (UBER.US) expand their business from restaurant takeout to other product delivery, including grocery delivery, the company is facing increasing competition.

For DoorDash, which is already the leading food delivery app in the US, the acquisition of InstaCart will expand the business scale of DoorDash's online grocery delivery market. The company's CEO Tony Xu recently described the grocery delivery business as the company's fastest growing business segment. DoorDash started with food and beverage takeout delivery, then gradually introduced more retailers such as Sephora, Macy's, Staples, and Anthropologie to its platform. Following the announcement of a partnership with Kroger last year, DoorDash has introduced more and more regional grocery retailers in recent months.

The deal will also help DoorDash better compete with retail giants such as Walmart (WMT.US) and Amazon (AMZN.US), both of which have elevated online grocery orders to a more strategic position in recent years.

Since the pandemic, the wider range of distribution applications has continued to be integrated. During this time, DoorDash launched a series of acquisitions. In addition to acquiring UK-based Deliveroo, the company also completed acquisitions of hospitality technology company SevenRooms Inc. and advertising technology company Symbiosys last year. In September of this year, DoorDash also agreed to acquire the smaller competitor GrubHub's campus catering business.

In addition, Instacart's high-margin advertising business and back-office technology business will further enhance DoorDash's recent efforts to provide enterprise-level tools for offline restaurants and retailer advertising management. Although transaction revenue still accounts for the majority of Instacart's total revenue, the company's advertising and corporate business accounted for close to 30% of revenue in the second quarter and is growing faster. Instacart's corporate customers include Costco. Costco uses Instacart's technology to provide online ordering services in North America and parts of Europe.

One connects local consumption, and the other goes deep into supermarket management: buying more than just delivering orders

DoorDash's main business is a local commercial platform and instant delivery: consumers buy restaurants, groceries and other retail products through the platform, and the company connects merchants and distributors, and monetizes through business such as merchant commissions, consumer service fees, DashPass membership and advertising, while providing merchants with their own channel ordering, delivery and management tools.

Instacart, on the other hand, goes deeper into the grocery retail system. Its business includes an Instacart Marketplace (Instacart Marketplace) for consumers, an enterprise platform (Instacart Enterprise) to help retailers operate online stores and fulfill contracts, and Instacart Ads (Instacart Ads) for consumer brands and retailers.

Supermarket orders involve a large number of products, out of stock replacement, fresh food selection, and matching of different specifications, and the operating requirements are different from food and beverage delivery; therefore, DoorDash's focus on existing InstaCart consumer and retailer partnerships also includes product data, picking and fulfillment experience, and retail technology. Ads are particularly noteworthy: Instacart revealed that advertising and other revenue in 2025 surpassed $1 billion, meaning that potential acquirers already have important monetization channels other than delivery services.

If the deal is completed, DoorDash is expected to simultaneously expand consumption scenarios, deepen merchant services, and enhance retail advertising capabilities. Catering users can be directed to supermarket shopping, and Instacart's home purchasing users may also increase other local spending; if member benefits, customer acquisition investment, and contract fulfillment resources can effectively collaborate, the platform has the opportunity to increase users' consumption share, reduce repeat customer acquisition costs, and allow more transactions to generate additional revenue through advertising and merchant tools. However, these are potential collaborations after mergers and acquisitions, and adding up orders cannot be directly equated to increased profits for the time being.

Approval also affects transaction value: According to Wedbush's analysis, even if third-party delivery still accounts for a small proportion of overall grocery consumption, if regulation focuses on a narrower online delivery market, or evaluates from the perspective of retailers choosing technology and fulfillment service providers, it is possible to find high concentration problems; the main line that is really worth the transaction is whether DoorDash can turn a wider consumer portal into continuous profit, rather than simply becoming a larger delivery platform.