Why DoorDash is spending $17 billion to acquire Instacart

DoorDash, the largest third-party delivery platform in America, has set its sights on expanding into grocery delivery with the acquisition of Instacart for $17 billion. Instacart, which was founded in 2012 and operates with over 2,200 stores across nearly 100,000 locations, has become a major player in the grocery delivery market.

DoorDash's acquisition of Instacart is a strategic move to diversify its offerings and compete with industry giants like Walmart and Amazon, which dominate online grocery sales. While restaurant delivery remains DoorDash's core business, the company has been investing heavily in other categories, including European delivery service Deliveroo, restaurant reservations platform SevenRooms, Grubhub's campus dining business, and ad platform Symbiosys.

However, grocery delivery was the missing piece in this puzzle until now. Instacart's acquisition by DoorDash will give the delivery giant a significant foothold in the grocery market, as Instacart controls a large portion of the third-party U.S. grocery delivery market. Additionally, the deal will allow DoorDash to collaborate with Instacart on tech solutions for in-store inventory management and data collection.

This partnership will enable both companies to gain valuable insights into product availability and customer behavior, ultimately helping to drive growth in the grocery delivery space.