Imperfect Foods Sets a Fresh Path to Growth
Sustainable grocery delivery firm Imperfect Foods says it has received a commitment to fund $95 million in a Series D growth investment.
The Series D financing will be led by Insight Partners, who also led the Series C round eight months ago, and Norwest Venture Partners. Imperfect Foods had triple digit growth in 2020 over the year prior, and exited the year with a revenue run rate in excess of $500 million.
In 2020, Imperfect Foods completed its transition from a regional produce-focused delivery service to a national full-service grocer, adding hundreds of items to its catalog.
With this new investment, the company plans to double capacity and product assortment in existing facilities, accelerate its highly successful private label program, improve the shopping experience, and support farmers and partners who are core to the business. With a growing subscriber base over 350,000 customers, Imperfect Foods has quickly become the leader in the mission-driven online grocery space.
“This planned funding underscores the solid infrastructure, supply and customer experience upon which we’ve built this company,” said Imperfect Foods CEO Philip Behn. “2020 proved there is a real and growing demand for the marriage of sustainability and convenience in retail food. As the leading direct-to-consumer online grocer with a coast-to-coast footprint and our own last-mile delivery fleet, we plan to continue improving the customer experience by doubling down on technology and building the ‘perfect imperfect assortment’ for our customers.”
“Imperfect is delivering a ‘mission with a margin’,” said Adam Berger, Insight Partners’ managing director and Imperfect Foods’ lead director. “Insight has backed the global leaders in delivered meal kits, ready-to-eat meals, restaurant delivery and even pet meals, and Imperfect Foods is proving they are the leader in sustainable grocery delivery. Their unit economics are exceptional, driven by their unique ‘farm to fork logistics’ that curates customized produce and groceries, with scheduled weekly deliveries to the customer’s doorstep. Imperfect Foods’ supply chain is unmatched and quickly gets fresh groceries from producers to consumers with minimum intermediaries and waste, completing the last mile in their own vans.”
Founded in 2015 with a goal of eliminating the 40% of unspoiled food thrown away in the U.S. each year, Imperfect Foods began their operations by delivering produce to consumers that was in surplus or deemed ugly yet was, by all other measures, perfectly healthy and fresh.
After four years of average triple-digit growth and a proprietary supply chain firmly in place, Imperfect Foods expanded into grocery staples in 2019 to include shelf-stable goods, dairy, meat and seafood. At the onset of the COVID-19 pandemic, its work of building a better, kinder food system took on new importance, from partnering with airlines to buy up allotments of first-class cheese plates to packaging the popcorn kernels from underutilized movie theaters. Imperfect Foods has built its profile and fast-growing subscriber base by shining the spotlight on a wasteful food system and changing the equation on how it can be consumed.
In related news, Imperfect Foods also said it is making its way into the personal care space by launching accessible and responsibly-sourced health and beauty products through its private label. First introduced in 2019, Imperfect Foods’ private label has grown tremendously (last year, the brand announced a Series C round of $72 million to fuel expansion of its delivery footprint and private label), and remains true to the mission of tackling food waste — in more areas than just produce.
The new range, consisting of a moisturizing avocado and honey body butter, a nourishing rose facial oil and a gentle and hydrating 3-in-1 soap, is the brand’s first venture outside of grocery items. All three products sourced directly from suppliers and are each priced under $10, allowing Imperfect Foods customers access to sustainable, high-quality, affordable health and beauty products from the online grocer. The line is available for Imperfect Foods customers through their weekly grocery service.
