DoorDash Is Paying $17 Billion, Mostly in Cash, for Instacart's Grocery Network

DoorDash will acquire Instacart for $65.00 per share, an equity value of roughly $17 billion, the companies said on October 29. The price is a 26% premium to Instacart's closing price on October 22, the last trading day before reports of a possible deal surfaced, and Instacart's board has unanimously approved the agreement.

The deal hands DoorDash the one large delivery category it has struggled to build on its own: grocery. Instacart brings both the technology and the retailer relationships that are hard to replicate, and the two companies together would combine the leading restaurant-delivery platform with the leading grocery-delivery platform.

Grocery is the missing piece

Instacart partners with more than 2,200 retail banners representing nearly 100,000 stores, a footprint DoorDash says it can extend by giving Instacart customers access to more than 50,000 additional stores. Grocery is operationally unforgiving: someone has to pick a ripe avocado, find a substitute a customer will accept, and get the ice cream delivered before it melts, as DoorDash chief executive Tony Xu put it.

The two companies argue the timing is forced by competition. The biggest online retailers and grocers are racing ahead, building their own delivery fleets, warehouses, membership programs, and AI shopping assistants, and a grocer running on thin margins cannot build all of that alone. DoorDash and Instacart say combining lets local stores of every size deploy the same tools the giants build for themselves.

DoorDash is also making post-close commitments aimed at easing those concerns: local grocers can keep working with any delivery platform they choose, and Instacart shoppers can keep the flexibility to decide how much they work and which batches to accept.

Instacart chief executive Chris Rogers framed the combination as a way to scale the grocery offering his company built over 14 years. DoorDash, for its part, has spent more than a decade building a delivery network that now spans more than 40 countries and has handled over 10 billion orders.

Mostly cash, with a bridge loan

The headline price is $65 a share, but the structure matters. Consideration is at least 75% cash, with up to 25% in DoorDash stock, subject to shareholder elections and proration. Instacart holders can elect $65.00 in cash, 0.3372 DoorDash shares, or a mix of $48.75 in cash plus 0.0843 DoorDash shares. Holders of about 19% of Instacart's outstanding shares have already agreed to vote in favor.

To fund the cash portion, DoorDash will use cash on hand plus debt financing, backed by a 364-day senior unsecured bridge loan commitment from JPMorgan Chase Bank. The transaction is not conditioned on financing, and DoorDash says it is targeting a capital structure that keeps investment-grade ratings. For members, the company projects that combining DashPass and Instacart+ would save an estimated $100 million a year in membership fees.

The real risk is the clock

Closing is expected by the end of 2027 or the first half of 2028, conditioned on Instacart shareholder approval, the Hart-Scott-Rodino antitrust waiting period, and other regulatory approvals including in Canada and Israel. That timetable, stretching well beyond a typical deal close, signals the companies are preparing for a lengthy review of what would be a merger of the two leading local-commerce delivery networks.

DoorDash has the operating momentum to absorb the wait. In its third-quarter release, reported the same day as the deal, total orders rose 28% year over year to 993 million, marketplace gross order value climbed 36% to $33.9 billion, revenue rose 34% to $4.6 billion, and adjusted EBITDA grew 41% to $1,060 million. The question regulators will spend the next year answering is whether combining the two networks meaningfully limits competition for consumers and retailers, and the answer will shape how much the grocery prize ultimately costs.