During online grocery's brief history in the marketplace, three power players have emerged. Walmart WMT, Instacart, and Uber UBER, a trio of well-established companies with dedicated user bases, are currently leading the race, but as the grocery delivery wars heat up, there's a fourth player that looks ready to throw its hat into the ring.
Online grocery platform Misfits Market on Tuesday announced that it had closed a $225 million Series C-1 funding round, bringing the company's total funding to $526.5 million and its valuation to a whopping $2 billion. Misfits Market, which emphasizes sustainable, accessible, and affordable grocery delivery nationwide, is still in its pre-IPO phase, but the new Series C-1 led by SoftBank Vision Fund 2 signals heavy investor confidence.
The company itself hasn't yet made any indication that it's considering a public offering, but it says it plans on using the new funding to fuel a nationwide expansion and a widening of its grocery selection.
"The Series C-1 will further accelerate Misfit Market's category expansion and increase our offerings as we build a complete online grocery platform," founder and CEO Abhi Ramesh told Modern Shipper. "In the last four months alone, we've doubled the selection of grocery items available to customers from 250 SKUs to 500 SKUs, and our recent debut of proteins in parallel with the launch of our Dallas, Texas, warehouse facility has led to more than 100,000 pounds of chicken, 48,000 pounds of steak and 34,000 pounds of salmon delivered by Misfits Market in just 10 weeks. In the next six months, we plan to double our SKUs with categories such as dairy, frozen and prepared foods."
Operating in 43 states and the District of Columbia and more than 26,000 ZIP codes nationwide, Misfits Market sources food that would otherwise go to waste and delivers it to customers' doorsteps at up to 40% off traditional grocery store prices. Its goal is to eradicate food deserts in America by 2025, and it might now have the funding to achieve that mission.
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"We have seen tremendous growth in 2021 and still have a number of grocery categories lined up and ready to be introduced to the Misfits Market ecosystem," said Ramesh. "We've been laser-focused on building our food value supply chain and this capital infusion enables us to deploy it nationwide and continue realizing our vision for a better grocery experience. Shoppers have responded and proven there is a market and an appetite for online grocery platforms that make quality food accessible and affordable. We're ready to bring Misfits Market into the kitchens of all Americans."
Earlier this year, Misfits Market attained unicorn status when its valuation topped $1 billion after a $200 million Series C round in April, and in the four months leading up to that funding raise, the company rescued more food than it did in all of 2020. According to Ramesh, the company so far this year has shipped 11 million apples, 3.5 million avocados, and 700,000 pounds of blueberries, saving a combined 170 million pounds of food that would otherwise have gone to waste.
While shoppers are beginning to make their way back to brick-and-mortar grocery stores, a slight majority of them are concerned about new COVID variants, and nearly half say they'll continue to be "hybrid" shoppers, making purchases both in-store and online. A potential return to normalcy clearly hasn't quenched the zeal of investors, though.
"We believe Misfits Market has a deep understanding of the inefficiencies in the food supply chain and are building their own from the ground up to radically change the way food makes its way to the consumer," said Lydia Jett, an investor and partner at SoftBank Investment Advisers who will join Misfits Market's board as part of the Series C-1. "I've been tremendously impressed by the focus and tenacity of Abhi and the Misfits Market team. We're excited to partner with the company as they expand their product offering and fulfill their mission to provide everyone access to high-quality, affordable food."
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