DoorDash Inc. announced plans to acquire rival Instacart in a $17 billion transaction aimed at cementing its dominance across the supermarket aisle and reshaping on-demand delivery.

The deal unites two of North America’s largest delivery platforms as third-party providers face mounting competition from brick-and-mortar retail giants. DoorDash, valued at $73 billion, plans to preserve the Instacart brand, its standalone app, and its network of 600,000 independent contractor shoppers.

Under the proposed arrangement, Instacart customers will gain access to 50,000 additional storefronts currently exclusive to DoorDash. The companies also intend to integrate their subscription tiers, allowing users paying $9.99 monthly for DashPass and Instacart+ to consolidate into a single membership. Retailers and supermarkets will retain the option to partner with either platform.

Founded in 2013 as a restaurant courier service, DoorDash moved aggressively into grocery delivery during the 2020 pandemic lockdowns.

While traditional grocers initially approached third-party delivery with caution — Kroger Co. originally limited a 2022 pilot to sushi, floral arrangements, and prepared meals — DoorDash has since expanded its reach, securing full product listings across all 2,700 U.S. Kroger locations as well as a recent fulfillment pact with Costco Wholesale Corp.

DoorDash’s rapid category expansion has pressured Instacart’s core market. According to Consumer Edge, Instacart’s share of U.S. delivery platform spending dropped from 26% to 18% over the past five years. During that same period, DoorDash increased its share from 44% to 59%, while Uber Eats remained steady at just under 20%. Today, DoorDash operates across 40 countries, fulfilling more than 3 billion orders annually through 9 million couriers, compared to Instacart’s 338 million orders.

DoorDash co-founder and CEO Tony Xu framed the acquisition as a necessary counterweight to dominant players like Walmart Inc., which controls 21% of U.S. grocery spending, followed by Amazon.com Inc. and Costco at 8% each, according to Numerator.

Walmart has also encroached on restaurant delivery, partnering with tenants such as Subway, Dunkin’, and Papa Johns across 2,400 locations.

“Over the past decade or even two decades, what you see is the largest companies are only eating more and more of the pie,” Xu told investors on a conference call. “That’s what this combination is really about, where DoorDash and Instacart can give every retailer a fighting chance at competing in the modern-day era.”

Apoorva Mehta, Instacart’s founder, endorsed the strategic fit. “Customers have 21 meals a week to figure out,” Mehta said. “Groceries and restaurant delivery each solve part of that problem. Serving customers well means bringing together the best of both.”

Tech analyst Jack Gold pointed out that with coming competition from international players, “it’s important [for DoorDash] to bulk up to be able to defend, but also to expand to peripheral markets.”

The transaction could create friction with key commercial partners. While Instacart fulfills orders for Walmart, DoorDash severed its tie with the retailer in 2022.

The deal is expected to close between late 2027 and early 2028, pending regulatory review and Instacart shareholder approval. Following the announcement, DoorDash shares gained 6% in early trading, while Instacart shares remained flat.