DoorDash Acquires Instacart in $17 Billion Deal
Grocery delivery sector consolidates as Instacart's market share declines amidst complex operational challenges.
Callum Smith
DoorDash has agreed to buy Instacart for $17 billion.
Instacart's brand and its application will continue to operate independently, maintaining its distinct presence in the market.
This acquisition follows a significant shift in market dynamics. Instacart's market share in U.S. delivery platform spending plummeted from 26% to 18% over the past five years. Uber Eats, in stark contrast, held a market share slightly below 20% during that same period.
Instacart operates with a vast network of 600,000 independent contractor shoppers. The platform processed 338 million orders in the last year alone.
DoorDash, which only began delivering groceries in 2020, claims this acquisition will supercharge its grocery delivery business.
Grocery is one of the hardest things to get right online.
Tony Xu, DoorDash's CEO, highlighted the inherent difficulties of online grocery delivery. He stated, "Grocery is one of the hardest things to get right online. Someone has to pick a ripe avocado, find a substitute you’d choose yourself, and get the ice cream to you before it melts. Together, we could give stores of every size more of those tools and unlock the potential of grocery delivery."