DoorDash on Thursday confirmed the rumors and announced its intention to acquire Instacart at a $17 billion valuation.
The deal is a logical one for a variety of reasons.
The two fit into the same category of mobile app-based, last-mile-fulfillment specialists that have shoehorned their way into the brick-and-mortar shopping habits.
These companies fall into a sort of “mobility” sub-category of retail media, too. While DoorDash doesn’t regularly break out ad revenue, it disclosed a year ago that it had surpassed $1 billion in such revenue in 2024. Instacart does discloses advertising revenue, and announced it earned it more than $300 million in Q3 this year. So these are billion-dollar ad businesses.
And Instacart and DoorDash are neatly incremental to each other. At least that’s the framing from the companies’ joint press release on the deal.
“Families turn to Instacart for the big weekly shop and to DoorDash for meals and nearly anything else they need from their neighborhood in under an hour,” per the release.
In other words, the two may seem to have competitive friction, since they work with many of the same convenience, pharmacy, grocery, clothing and apparel chains. But they exist as part of different types of shopping habits and convert different types of purchases, even if it’s the same product from the same store. Imagine an impulse-buy snack and soda order and the same items in a grocery cart.
And this somewhat anecdotal hypothesis is borne out by their respective data. DoorDash reported in its quarterly earnings today (busy day!) that it processed 993 million total orders in Q3. It earned $33.9 billion on those orders.
Instacart had only 91.4 million total sales, per its quarterly earnings report (also today, can you imagine?). And it earned $10.5 billion.
Instacart converts a tenth as many checkouts, but its gross marketplace sales are a third the size of DoorDash. Thus proving, at least, that its average order size is much larger.
When considering the timing of this proposed acquisition, one cannot ignore the politics of antitrust and acquisition, and of this moment.
DoorDash has expanded its lobbying presence in recent years and has ingratiated itself with the Trump administration. Perhaps you caught this DoorDash-White House photo op. The delivery firm was a Trump inauguration donor, too, but it has been opposed by some prominent Democrats with stances on labor policy and litigation.
The Biden administration would perhaps have taken a sharp look at this merger as a potential antitrust violation. Especially considering the spree of mobile marketplaces DoorDash has acquired, including Wolt (in Finland), Deliveroo (the UK) and SevenRooms (a marketing platform for restaurants, hotels and venues).
Compare what I predict will be the breezy way this DoorDash-Instacart deal goes through to the nightmarish undoing of the proposed merger between Kroger and Albertsons, which was opposed by the Biden-era DOJ. The two grocery chains are now embroiled in a massive lawsuit themselves over who caused the deal to crash and burn.
If Kroger and Albertsons had waited – and, frankly, paid some millions of dollars in lobbying funds to a President Trump-approved recipient – that deal might have skated by without a fuss.
Which is all to say, don’t expect the deal-making to stop. There are still valuable independent mobility-and-advertising businesses like Lyft, Gopuff (which white labels its own ad sales through DoorDash, by the way) or even GSTV (it sells ads on gas pump screens).
Nowadays, who knows what could happen?
