A San Francisco-based delivery giant is in the making as DoorDash announces it has struck a deal to acquire grocery-delivery app Instacart for $17 billion.
SF-based DoorDash continues consolidating its hold on the delivery sphere today with the announcement that it is buying Instacart for $17 billion. As NBC News reports, the deal means that DoorDash users will immediately be able to start buying groceries through Instacart's network of stores, and subscribers to Instacart+ and DashPass will no longer have to pay for both, as they will become one.
50,000 additional stores that are in the DoorDash realm will also become available on Instacart, which boasts access to over 100,000 stores.
Until the acquisition is finalized, the companies — whose offices are just a few blocks from each other in downtown SF — will continue to operate independently of one another. And DoorDash is expected to retain the Instacart brand and its standalone app.
Instacart CEO Chris Rogers said in a statement Thursday, "Over the last 14 years, Instacart has transformed online grocery by helping retailers of all sizes compete and grow, and joining forces with DoorDash allows us to do even more."
And in a call about the deal, reported on by Business Insider, DoorDash CEO Tony Xu said, "I think Instacart has built a great brand, and it is a very unique brand where their audience is very loyal to that brand."
DoorDash has been in acquisition mode for a while, having acquired GrubHub Campus Dining (formerly Tapingo) from parent company Wonder last month for $300 million, and the British delivery app Deliveroo last year for $3.9 billion. Back in 2019, DoorDash acquired the SF-based, higher-end food delivery app Caviar for $410 million.
As NBC notes, in the face of the Amazon-Whole Foods juggernaut, the food delivery industry has been consolidating overall, with UberEats having acquired PostMates and Delivery Hero. And Instacart has struggled to find ways to grow since having its boom moment during the pandemic.
The Instacart deal will also bring together delivery drivers for both DoorDash and Instacart, allowing them to make deliveries for both services, as Business Insider notes.
DoorDash's stock price was up over 8 points or around 5% at multiple points since this morning.
