Misfits Market has revealed that it will acquire fellow e-grocer Imperfect Foods. The united brands will aim to deliver a more sustainable grocery experience and put the combined business on track to surpass $1 billion in sales and reach profitability by early 2024.
Founded to build a better food system and fight food waste, Imperfect Foods will bring complementary and sustainably designed delivery networks to the Misfits Market banner. The acquisition will position Delanco, N.J.-based Misfits Market to continue building a supply chain that addresses inefficiency, lowers prices and improves how consumers shop for groceries online. While the brands will continue separate operations for the time being, Misfits Market founder and CEO Abhi Ramesh will become CEO of the combined company, while Imperfect Foods executives will join the Misfits Market leadership team.
“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.”
“Scale matters in grocery, and this combination makes us a truly meaningful disruptor in the space,” noted Dan Park, CEO of San Francisco-based Imperfect Foods, who joined that company earlier this year. “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.”
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 legal advisor to Imperfect Foods. The deal is subject to regulatory approvals and customary closing conditions.
Misfits Market currently delivers organic produce, 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. To date, the company has raised more than $525 million in funding. Founded in 2015, Imperfect Foods works directly with farmers and producers to rescue, redistribute and develop goods across various grocery categories, including its own private label offerings, for a fully customizable grocery experience.