DoorDash has offered $17 billion to buy Instacart, a deal that could change how you get your groceries delivered. DoorDash says the deal would give shoppers more choice and better access to cheap delivery and savings.
Under the plan, Instacart's app and brand name would stay the same. Grocers could still pick which service they want to work with, DoorDash said in a news release. Instacart customers would also get access to 50,000 more stores through DoorDash's platform.
This would bring together two of the biggest names in grocery delivery. DoorDash started in San Francisco in 2013 as a restaurant delivery service. It added groceries in 2020, during the COVID-19 pandemic. Today it works in 40 countries, completed more than 3 billion orders last year, and uses 9 million independent delivery workers. The company is worth $73 billion.
DoorDash has been growing its grocery deals. It teamed up with Kroger in 2022, starting with flowers, sushi and ready meals. That partnership grew last fall, and now DoorDash lists everything from all 2,700 Kroger stores. DoorDash also started delivering for Costco in September.
Instacart, founded in 2012, focuses on grocery and convenience store delivery in the U.S. and Canada. It has 600,000 independent shoppers who completed 338 million orders last year. Instacart is worth $14 billion.
DoorDash co-founder and CEO Tony Xu said grocery delivery is tricky to get right. He said someone has to pick a good avocado, find the right substitute, and get the ice cream to you before it melts. He said combining the two companies could give stores better tools for grocery delivery.
This deal comes as DoorDash keeps gaining ground while Instacart loses it. Over the past five years, Instacart's share of U.S. delivery spending dropped from 26% to 18%. DoorDash's share grew from 44% to 59%. Uber Eats stayed close to 20%. These numbers come from Consumer Edge, a market research firm.
It is not yet clear what happens to some current deals. Instacart delivers for Walmart, but DoorDash stopped working with Walmart back in 2022.
What this means for you
If you order groceries online, this deal could affect your options down the road. Here is what to watch for:
- Instacart's app may stay the same for now, but stores you can order from could grow.
- Your grocery store may choose to work with one service over the other.
- Prices and delivery choices could shift as the companies combine.
This site aims to explain big business news like this in plain words, so you do not need a dictionary to keep up. As a next step, check if your favorite grocery store already uses DoorDash or Instacart, so you know what to expect if the deal goes through.
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