Misfits Market, a direct-to-consumer online grocery platform for organic and sustainably sourced food, has acquired online grocer Imperfect Foods.
The planned acquisition will unite both brands to “deliver a better, more sustainable grocery experience,” and put the combined business on track to cross $1 billion in sales and reach profitability by early 2024, according to a release.
While the brands will continue separate operations in the short term, Misfits Market founder and CEO Abhi Ramesh will serve as CEO of the combined company, with executives from Imperfect Foods joining the Misfits Market leadership team, according to the release.
“We have a tremendous opportunity to advance the shared mission of both brands, which is nothing less than a fundamental reimagining of both the grocery category and the broken U.S. food system,” said Ramesh. “The strengths of the Imperfect Foods organization, from its in-house delivery fleet and robust private label program, to its sustainability commitments and innovation, add immediate scale and depth to what we’re building at Misfits Market.”
Founded to build a better food system and fight food waste, Imperfect Foods brings complementary and sustainably designed delivery networks to the Misfits Market banner. As a result of the acquisition, Misfits Market says it will be well positioned to continue building out a supply chain that tackles inefficiency, lowers prices and strives to fundamentally improve how consumers shop for groceries online.
“Scale matters in grocery, and this combination makes us a truly meaningful disruptor in the space,” said Imperfect Foods CEO Dan Park. “Both organizations have made significant progress as individual brands — together, we have already rescued nearly 500 million of pounds of food that may otherwise have gone to waste, and driven innovation in a category propped up by antiquated technology and thinking.
“The combined experience and expertise of this newly merged team will exponentially increase our ability to take on established players in the traditional grocery space,” added Park.
In the U.S., food waste is estimated at between 30%-40% of the food supply.
With climate change increasingly impacting the food ecosystem, “the gaps and inefficiencies in an outdated grocery supply chain have become fault lines, driving up prices and increasing what were already inexcusable levels of waste,” the companies said.
Misfits Market and Imperfect Foods say they have proven a better model exists, and together, both brands will step forward to scale this new approach and deliver a better food system for farmers, suppliers and customers in every community across the country.
Wilson Sonsini Goodrich & Rosati is serving as legal advisor to Misfits Market. Solomon Partners is serving as exclusive financial advisor to Imperfect Foods, and DLA Piper is serving as its legal advisor. The transaction is subject to regulatory approvals and customary closing conditions.
Headquartered in Greater Philadelphia, Misfits Market was founded in 2018 and has raised more than $525 million in funding to date. Today, Misfits Market says it delivers organic produce, high-quality meats and seafood, plant-based proteins, dairy, bakery, wine and other grocery items to nearly every ZIP code in 48 states, at up to 40% off traditional grocery store prices.
Founded in 2015, Imperfect Foods works directly with farmers and producers to rescue, redistribute and develop goods across multiple grocery categories, including its own private label offerings. To learn more, visit imperfectfoods.com.