DoorDash has agreed to buy grocery delivery app Instacart for $17bn, paying $65 per share — a 26% premium over Instacart’s pre‑rumour price. About 75% of the consideration will be cash, backed by a bridge loan from JPMorgan, with the rest in DoorDash stock. Tony Xu, DoorDash co‑founder and CEO, said the deal gives DoorDash access to Instacart’s marketplace and retailer relationships, crucial for mastering the complexities of online grocery.
The transaction continues a wave of consolidation in food and grocery delivery: Deliveroo was bought for £2.9bn, Prosus acquired Just Eat Takeaway for €4.1bn, and Uber paid nearly $15bn for Delivery Hero. Instacart shares fell over 2.5% in pre‑market trading, while DoorDash rose up to 10%.
Instacart had approached both Uber and DoorDash earlier this year about a sale. The combined entity will also face emerging competition from personal AI shopping agents such as Meta Muse and OpenAI’s Dot, and from giants Amazon and Walmart. Analysts at Citi valued Instacart at roughly $13.3bn, noting supplier concentration risk. Regulators may scrutinise the deal given the narrow third‑party grocery delivery market, though DoorDash pledged lower subscription fees and no exclusive supplier mandates.
Source: Financial Times Companies · Summarized by HeadlinesBriefing