Dive Brief:
- Misfits Market has raised $200 million in Series C funding, bringing the total amount of money the direct-to-consumer grocer has raised to $301.5 million and pushing its valuation beyond $1 billion, the company announced on Wednesday.
- The company plans to use the funding to complete its West Coast expansion and continue augmenting the array of fresh produce, proteins and pantry items it sells, according to Abhi Ramesh, founder and CEO of Misfits.
- Misfits Market is riding a wave of growth driven by the shocks to the nation's food distribution system brought on by the pandemic.
Dive Insight:
Misfits is drawing heightened attention from investors as it fine-tunes its business model to take advantage of growing interest in direct-to-consumer food retailers.
The company shipped 77 million pounds of food to more than 400,000 customers in 2020 and saw its active customer count and order volume both increase by 400% during the year, according to the press release.
Misfits, which highlights its efforts to supply food to underserved areas, has prevented the same amount of food from being wasted during the first four months of 2021 as it did in all of 2020, the press release noted. The company said the new funding will support its goal of eliminating food deserts in the United States by 2025.
"In 2020, Misfits Market found itself in the middle of a global sea change — the food supply chain experienced a once-in-a-100-year disruption, with major institutions and households changing the way they source and consume food," Ramesh said in a statement.
Misfits' latest capital infusion builds on an $85 million round of investment the company announced in July. In the time since it closed that funding round, Misfits has opened a new headquarters and distribution center in Delanco, New Jersey, that allowed it to double its delivery capacity on the East Coast and also started selling a selection of meats, poultry and seafood.
Misfits began service in 10 new states over the past year and currently serves 36 states as well as Washington, D.C. The company intends to double its workforce, which now includes more than 1,000 employees, during the coming year.
Misfits has also taken recent steps to expand in the West. In August, Misfits announced that it would locate a new distribution and customer service center in West Jordan, Utah, The Salt Lake Tribune reported. According to the press release, Misfits has also embarked on an expansion in the Pacific Northwest and will be taking its initial orders in Oregon and Washington on Wednesday.
The funding round was led by Accel and D1 Capital Partners, which are also investors in on-demand delivery company Gopuff. Other participants include Valor Equity Partners, Greenoaks Capital, Sound Ventures and Third Kind Ventures.
Misfits faces competition from a range of companies as it looks to capitalize on its image as a sustainability-focused food provider, including supermarket chains, which are increasingly focusing on preventing food waste and hunger.
The company's competition also includes Imperfect Foods, which announced in January that it had brought in $95 million in an investment round that valued it at $700 million, Bloomberg reported. In March, Imperfect Foods unveiled plans to achieve net-zero carbon status by 2030.
