DoorDash has announced that it is acquiring grocery giant Instacart at an equity valuation of $17 billion, in a cash-and-stock deal. Subject to regulatory and shareholder approvals, the deal is expected to close by the end of 2027 or in the first half of 2028. DoorDash claims that, thanks to the deal, customers will have the flexibility to buy daily essentials from more stores, which also increases their chances of getting bargain deals and faster deliveries.
“The combined company will offer grocers and retailers of every size DoorDash’s delivery network and Instacart’s grocery and fulfillment technology, in both apps and on stores’ own websites, along with the advertising and AI tools each company has built,” the company said in a press statement. For an average customer, there are a couple of tangible benefits emerging from this multi-billion dollar deal.
First, DashPass and Instacart+ are getting merged into a single subscription. DashPass launched back in 2018, promising perks like unlimited free delivery for $9.99 per month. Back then, the company said customers saved roughly $20 per month on average with DashPass. Instacart+, on the other hand, was introduced in 2022, promising free delivery on orders above $35, lower service fees, and 5% credit back, among other benefits. It was priced at $9.99 per month, or $99 for the annual plan.
DoorDash hasn’t revealed what the combined subscription will be called, or more importantly, how much it will cost. The company, however, says customers will get access to 50,000 more stores through Instacart. Local businesses can choose to work with both platforms, while delivery partners will be able to combine Instacart and DoorDash orders, giving them more flexible earning opportunities.
The two companies will continue to operate independently until the acquisition is approved by regulators. Interestingly, the two companies have been discussing a merger since 2021. Instacart went public in 2023, and both companies turned profitable a year later. Instacart, lately, has been trying to jazz up its image with initiatives such as paying shoppers to capture videos in its stores.