DoorDash Buys Instacart, Puts It In A Bigger Bag
The $17 billion deal puts one grocery delivery app inside another. Both will stay on your phone, like a bag inside a bag.
SAN FRANCISCO—DoorDash said Thursday it will buy Instacart for about $17 billion, or $65 a share, in a deal that places one app that brings you groceries inside another app that brings you groceries. Both apps will remain on your phone. Analysts described the arrangement as a bag inside a bag, which every household in America already keeps under the sink.
According to Grocery Dive, the price is a 26% premium to Instacart's closing stock price on Oct. 22, and at least 75% of it will be paid in cash. The deal is expected to close at the end of 2027 or in the first half of 2028. Until then, the two companies will operate separately, which they have been doing for years with great discipline.
DoorDash said it plans to keep Instacart's brand, its app and its enterprise technology. It also gets access to Instacart's more than 600,000 couriers and an advertising business that brought in $331 million last quarter, roughly 30% of Instacart's revenue. DoorDash's own third-quarter revenue was nearly $4.6 billion, about four times Instacart's, which is the usual ratio between a cart and the basket riding in its child seat.
I was in a cart. Now I am in a cart that is in a cart…
"I was in a cart. Now I am in a cart that is in a cart," said a fictional bag of baby spinach waiting at a pickup door in Oakland, California. "Nobody has told me which app is delivering me. I have decided to remain crisp and let the lawyers sort it out."
Sellers took the news calmly. A seller I trust, who has run a grocery storefront through both apps since 2020, said she will now have two dashboards that will eventually become one dashboard (seller forum, 2:14 a.m.). "I have seen this movie," she wrote. "It ends with three dashboards."
A fictional courier in San Jose who already drives for both companies said the merger changes nothing about his day except the number of times his phone congratulates him. "Now they can thank me in the same notification," he said. "I look forward to being a valued partner twice, at once."
Continued on page A6, which will be delivered in a bag inside a bag
