The News
DoorDash agreed to buy Instacart for about $17 billion, or $65 a share. It told investors it wants to manage grocers’ inventory in its own warehouses. The deal is expected to close at the end of 2027 or in the first half of 2028, and the two companies run separately until then.
“A grocery store was never set up for delivery,” DoorDash wrote in its Q3 letter. Its DashMart warehouses filled orders with 99%+ accuracy and delivered more than 10 minutes faster than other grocery orders in the same areas.
Instacart works with more than 2,200 retail banners covering nearly 100,000 stores. DoorDash plans to keep Instacart’s brand, app and the enterprise technology grocers use to run their own online stores.
The details
DoorDash already stocks other grocers’ products in its DashMart warehouses, including thousands of items from Giant Eagle and Albertsons. It says Instacart adds the scale that kind of warehouse needs to bring costs down.
“Managing inventory inside a warehouse is a fixed cost business,” the letter says. DoorDash said its initial aims in grocery, built on third-party fulfillment, “won’t be the end state.”
The deal release pitches DashMart Fulfillment Services to grocers that need more capacity for online orders.
DoorDash sees a path to $500 million or more in annual synergies, net of investments.
Grocers keep their delivery options under DoorDash’s written commitments. It listed “no grocery exclusivity” among its post-close promises, so local grocers can work with any delivery platform.
Instacart customers would gain access to more than 50,000 additional stores on top of today’s nearly 100,000.
Instacart’s 600,000-plus shoppers can choose whether to take DoorDash orders or keep shopping only on Instacart.
Instacart dropped one in-store product four days before the deal. Its board decided to wind down Caper Carts, the smart carts it bought about five years ago for $350 million, because “retailer adoption has not scaled quickly enough to justify our continued investment.”
The wind-down should be mostly done by the end of Q2 2027, at a pretax charge of $55 million to $80 million.
Weis Markets was among the Caper partners Instacart named this summer.
Instacart says its in-store work now centers on software: Carrot Tags shelf labels, FoodStorm prepared-food ordering and shelf-scanning tools for grocers and brands.
Advertising is Instacart’s fastest-growing line. Ad and other revenue rose 23% in Q3 to $331 million, about 30% of revenue, while orders grew 10% to 91.4 million.
Ad growth has beaten order growth for three straight quarters after trailing it for most of 2025, results show.
DoorDash says more grocers could use Instacart’s technology to run their own retail media networks, and brands would gain “a scaled alternative for reaching customers online.”
My notes
DoorDash wants grocery picked in its warehouses. Its letter says a store “was never set up for delivery” and that holding grocers’ inventory itself is important. A grocer that signs up for DashMart Fulfillment hands its online stock to the company that also runs the app its customers order from. I think that is the decision this deal puts in front of grocers.
The exclusivity promise covers delivery apps. DoorDash committed that grocers can use any platform. The release says nothing about the shopper data that moves through Instacart-built grocer websites and retail media networks once one company owns both.
Caper is the first cut. Instacart dropped a $350 million purchase because too few retailers adopted it, and plans to put the savings into other growth bets. I’d read it as the test every Instacart product with thin retailer uptake now faces, under a buyer promising $500 million a year in synergies.
What’s next
The deal needs Instacart stockholder approval and US antitrust clearance, plus approvals in Canada and Israel. Caper’s wind-down is due to finish by the end of Q2 2027, well before the deal closes.
Photo: Phillip Pessar / Wikimedia Commons (Flickr), CC BY 2.0
