Emmy Martin and Lauren McCarthy

SAN FRANCISCO: DoorDash said Thursday that it had agreed to buy Instacart for $17 billion, in a deal that would fold the nation’s dominant grocery delivery app into the company that already controls most of America’s restaurant takeout orders.

Together, the companies would command a large share of the business of bringing dinner and groceries to Americans’ doors. Under the terms of the agreement, Instacart shareholders will receive $65 per share, 26% over the company’s price on Oct. 22, before media reports of the deal surfaced.

The deal has been approved by both companies’ boards. Shares of Instacart rose nearly 5% in premarket trading, while DoorDash shares rose more than 7%.

Combining the companies’ technology and infrastructure will make it “the best in class product for all retailers to be able to compete against the world’s biggest companies,” Tony Xu, CEO of DoorDash, said on a call with investors. It will result in faster deliveries and “enable more affordable prices, which, in turn, will generate more sales for every grocer or retailer and more earnings opportunity for every shopper.”

In the third quarter, DoorDash said it completed 993 million orders, up 28% from a year earlier, as customers spent nearly $34 billion. The company brought in $4.6 billion in revenue. Instacart’s latest results, for the second quarter, showed that it handled 90.3 million orders worth about $10.4 billion, generating revenue of just over $1 billion. Both companies have headquarters in San Francisco.

The takeover is DoorDash’s largest to date, surpassing its roughly $8 billion buyout of Finnish food-delivery company Wolt and its acquisition of Deliveroo, a British rival. It was also a striking turn for Instacart, which was valued at $39 billion by private investors during the pandemic grocery boom and went public in 2023.

With a market capitalization of around $14 billion, Instacart has since come under mounting pressure from larger rivals moving onto its turf. DoorDash, with a market capitalization of around $73 billion, has been one of the main sources of that pressure. Last year, it began offering full grocery delivery from nearly 2,700 Kroger-owned stores nationwide, an announcement that sent Instacart’s stock tumbling.

That year, DoorDash also added Family Dollar and dozens of other grocery partners. For DoorDash, the deal offers a shortcut to scale in a category where grocery orders are large and potentially more profitable than a single restaurant meal. Instacart brings relationships with more than 2,200 retailers. The companies said that the deal was expected to close late next year or in 2028. The deal will need regulatory approvals to close.

Combining two major food delivery companies could raise antitrust concerns about the elimination of competition from the market. It could also prompt questions about the impact on delivery workers and grocery stores. Under President Donald Trump, the Department of Justice has allowed a number of major deals to go through, and companies have been rushing to announce large deals in the more favorable regulatory environment. While the Trump administration has subjected some major deals to additional scrutiny that can delay their ability to close, it has been more reluctant to file lawsuits to block mergers.

The department has also shown an openness to settlements that could resolve any concerns about deals. Rebecca Haw Allensworth, a law professor at Vanderbilt University who studies antitrust, said the chances of a federal government challenge to the deal were “low but not negligible” given the administration’s lighter-touch approach and the possibility the companies would lobby to get the deal approved. But states or private plaintiffs could sue to block it, especially given the costs of basic goods like groceries have become a potent political issue, she said.

DoorDash stressed that the combination would be good for local businesses. The company said in its release that after the deal closes, it would charge one price for both memberships and that local grocers would not have to sign exclusivity agreements with the new company. When asked about the deal’s timing on the investor call, Xu said the company’s core business was doing well. “We felt like we had the space to do something offensive,” he added.

The grocery delivery field has become increasingly crowded. Amazon expanded same-day delivery of perishable groceries to roughly 2,300 cities in 2025, while Walmart and Uber have pushed aggressively into grocery delivery as well. Instacart was a hot startup to rise from the 2010s class of “on-demand” apps that provided anything a customer wanted, from warm cookies and cannabis to car washes and manicures, at the tap of their phones.

Many of the well-funded startups from that era went away after they were unable to turn a profit with their business model, which relied on armies of independent contractors, or “gig workers.” Those that remained consolidated. Uber acquired Postmates. Wonder Group bought Grubhub. Uber and DoorDash had entertained buying Instacart at various points over the years, including in 2021 as the company was coming down from a surge in pandemic growth. But the deals fell apart and Instacart’s co-founder and CEO, Apoorva Mehta, left the company. Instacart went public in 2023 with a pitch that it had expanded beyond its cash-burning grocery delivery business and into more profitable areas like advertising and software. In a statement, Mehta said he and Xu had explored bringing the two companies together for years.

“We kept coming back to it because the industrial logic has always been clear,” he said. DoorDash plans to finance the deal with a mixture of cash and debt. Instacart shareholders will need to approve the deal, and 19% have already agreed to vote in its favor, DoorDash said. They will have the option to receive a cash payout, DoorDash stock or a mix.