DoorDash agrees to buy Instacart for $17 billion as both companies report third quarter results

DoorDash and Instacart said Thursday they have signed a definitive agreement for DoorDash to buy the grocery marketplace, whose legal name is Maplebear Inc., for $65.00 a share in cash and stock. That works out to an equity value of about $17 billion and a 26% premium to Instacart's closing price on Oct. 22, the last trading day before reports of talks surfaced. Both companies released third quarter results the same morning, and Instacart cancelled the earnings call it had scheduled for Nov. 5.

The deal puts the largest US restaurant delivery platform together with a grocery marketplace that works with more than 2,200 retail banners, and it will take a long time to close. The companies expect the transaction to complete at the end of 2027 or in the first half of 2028, after an Instacart shareholder vote, the expiration of the Hart-Scott-Rodino waiting period in the US, and approvals in Canada and Israel.

The terms

Instacart holders can choose one of three forms of payment for each share: $65.00 in cash, 0.3372 DoorDash shares, or $48.75 in cash plus 0.0843 DoorDash shares. Stock is capped at 25% of the total consideration, so at least 75% of the price is paid in cash, and stock elections will be prorated if too many holders ask for shares. DoorDash plans to fund the cash from its balance sheet and new debt, including a 364-day senior unsecured bridge facility committed by JPMorgan Chase, and says it wants to keep an investment grade capital structure. The deal has no financing condition.

Instacart's board approved the agreement unanimously, and holders of about 19% of its outstanding shares have already agreed to vote in favor. Centerview Partners led the financial advice for DoorDash alongside J.P. Morgan, with Latham & Watkins as counsel. Goldman Sachs advised Instacart, with Cravath, Swaine & Moore and Cooley as counsel.

What DoorDash says it is buying

Instacart works with more than 2,200 retail banners representing nearly 100,000 stores. DoorDash says Instacart customers would gain access to more than 50,000 additional stores, and that members of DashPass and Instacart+ would pay a single membership fee instead of two, which the companies estimate would save those members about $100 million a year.

DoorDash is targeting a multi-year path to $500 million or more in annual synergies, net of investments. It says it will reinvest more than 100% of those synergies in the first year after closing and expects the net figure to turn positive in year two. The company argues that combined volume will improve delivery density, speed and fulfillment cost, spread the fixed cost of the warehouses where it manages grocer inventory, and let it pair Instacart's enterprise software with its own fulfillment services to sell first-party products to grocers. It also expects the combined audience to be more attractive to advertisers.

DoorDash co-founder and CEO Tony Xu said in the announcement that grocery is one of the hardest categories to get right online and that Instacart has spent years learning how to serve grocers. Instacart CEO Chris Rogers said the company has spent 14 years helping retailers of every size compete online and that pairing its grocery technology with DoorDash's consumer reach and logistics should make online grocery more affordable. DoorDash expects to keep the Instacart brand, app and enterprise products, and the two companies will operate independently until the deal closes.

Commitments to grocers and shoppers

The announcement includes a set of promises aimed at the retailers and gig workers who will decide whether the combination holds together. DoorDash says the combined platform will be open, with no grocery exclusivity, and The Shelby Report reported that grocers currently under exclusive arrangements with either company would be free to list on other platforms at closing. Instacart shoppers would keep their current features, including batch visibility and ratings, and could decide whether to take DoorDash orders or shop only on Instacart.

The Shelby Report also reported that the companies said grocery prices would not rise because of the deal and that 99% of US SNAP households have at least one store available on DoorDash or Instacart. Those two points appear in the trade publication's account rather than in DoorDash's investor release.

Two record quarters on the same morning

Instacart's third quarter results, filed the same day, showed gross transaction value of $10.53 billion, up 15% from a year earlier, on 91.4 million orders, up 10%. Total revenue was $1.1 billion, up 17%, with advertising and other revenue rising 23% to $331 million. GAAP net income was $147 million and adjusted EBITDA was $342 million, up 23%. Rogers called it the company's best quarter since its IPO. Instacart suspended its financial guidance and withdrew its long-term targets because of the pending deal.

DoorDash reported 993 million total orders in the quarter, up 28%, or 17% excluding Deliveroo, the UK platform it bought last year. Marketplace gross order value was $33.9 billion, up 36%, and revenue was $4.6 billion, up 34%. GAAP net income attributable to common stockholders was $466 million, adjusted EBITDA was $1.06 billion, and free cash flow was $787 million. For the fourth quarter DoorDash guided marketplace GOV to between $35.4 billion and $36.4 billion and adjusted EBITDA to between $900 million and $1.1 billion. It will stop breaking out results excluding Deliveroo from the fourth quarter onward.

Separately, Reuters reported that Instacart told regulators it will wind down its Caper Cart smart shopping cart business by the end of the second quarter of 2027, with expected pre-tax charges of $55 million to $80 million.

How the deal came together

The Information reported on Friday, Oct. 23, that Instacart had held preliminary talks with both Uber and DoorDash. The Wall Street Journal reported advanced talks with DoorDash on Monday, Oct. 26, and Reuters, citing a person familiar with the matter, reported the same day that the Uber talks were no longer active and that a deal could be finalized within days. Instacart's market value was about $13 billion at the previous Friday's close. Its shares rose about 8% on Monday while DoorDash fell about 6%.

24/7 Wall St. noted that Citi analyst Ronald Josey wrote on Oct. 26 that a valuation of $16 billion to $17 billion implied roughly $65 a share at the midpoint, which is where the price landed. The same outlet recalled reports from 2021 that DoorDash had discussed buying Instacart for $40 billion to $50 billion before those talks fell apart, partly over regulatory concerns. Nick Smith, co-founder of Manifesto Growth Architects, told Reuters that DoorDash was the more natural buyer because its restaurant network pairs with Instacart's grocery expertise.

Market reaction and what to watch

DoorDash shares rose in premarket trading on Thursday. NBC News put the gain at more than 9%, while Yahoo Finance's live market blog reported a move of more than 5% with Instacart edging lower. NBC News also noted that DoorDash's stock had fallen by about a third over the past year on rising costs, that Instacart's had been flat for two years amid competition from Amazon and Walmart, and that DoorDash handled about two-thirds of US food delivery volume as of 2024, citing Bloomberg data.

Regulatory review is the open question. Beyond the antitrust waiting period, both platforms face scrutiny over how they treat delivery workers. NBC News reported that DoorDash settled with New York City regulators last month for $131.5 million over claims that it withheld tips, and that the company acknowledged some Dashers were underpaid or paid late. The consolidation trend is also broader than this one deal: Reuters noted that DoorDash bought Deliveroo and Uber acquired Postmates and Delivery Hero as the post-pandemic delivery boom gave way to higher labor costs, tighter regulation and slower growth.

For grocers, the near-term questions are practical. Retailers under exclusivity with either platform will have to decide whether to list on both at closing, advertisers will be watching how the two retail media businesses are combined, and anyone relying on Caper Cart hardware has until mid-2027 to find a replacement. For investors, the first-year reinvestment of all synergies means the deal is being sold on scale and density rather than on immediate margin.