Online grocer Misfits Market has announced a $200 million Series C funding round co-led by led by Accel and D1 Capital, with participation by Valor Equity Partners, Greenoaks Capital, Sound Ventures and Third Kind Ventures.
The over-subscribed round brings the company’s total funding to $301.5 million, according to a Wednesday (April 21) press release. The company said it has now achieved unicorn status, meaning its value is above $1 billion.
Misfits Market says it is the only direct-to-consumer (D2C) food delivery firm that offers discounts of up to 40 percent compared with premium and in-store brands.
As the pandemic shook the grocery industry with an influx of homebound consumers looking to home delivery, Misfits Market “saw 5x growth in its active customers and order volume last year, shipping more than 77 million pounds of food to over 400,000 customers” across the U.S., per the press release.
The company “tripled its farmer and supplier relationships to rescue food, preventing waste as well as significant losses for farmers and producers,” according to the press release, which notes, “In the first four months of 2021 alone, Misfits Market has rescued the same amount of food as it saved in 2020 as a whole.”
As 68 percent of grocery shoppers who used food delivery services during the height of the pandemic plan to continue shopping online, Misfits Market is preparing for “ongoing customer acquisition and retention while promoting less hassle and more discovery throughout the shopping process,” the release said.
Ryan Sweeney, partner at Accel and now a Misfits board member, said while D2C models are not new in the grocery industry, Misfits Market has taken a fresh approach. “Instead of focusing only on their end customer, they’ve managed to create a dynamic solution that also supports food suppliers at every level,” Sweeney said.
Misfits Market Founder and CEO Abhi Ramesh said the company will use its new funding to continue expanding its geographic distribution footprint into the West Coast as well as expanding its selection of organic produce and sustainably-source products.
“There’s the excess and then there’s the rest of the produce that doesn’t make the cut,” Abhi Ramesh told PYMNTS in an interview last summer, explaining the company’s mission to bring affordable, healthy food to people. “Ugly is sort of this broad term that has been almost used as a marketing factor in this industry, but it’s not even ugly. Its anything that is non-standard.”
Since its $85 million Series B funding in July 2020, the company has expanded its footprint, according to the press release, expanding in grocery categories, increasing delivery capacity and establishing a West Coast headquarters in Utah.
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