Dive Brief:
- Misfits Market has raised $85 million in Series B funding, according to a company press release. The round was led by Valor Equity Partners. This brings the company’s total funding since its founding in 2018 to more than $101 million.
- Like many food delivery companies, Misfits saw demand surge during COVID-19, growing 400% in the past three months. The new funding will help Misfits provide new offerings. increase services for shoppers and move into new markets. It was also used to hire 400 employees needed to support grocery demand during the pandemic.
- Misfits Market plans to open a new warehouse in Delanco, New Jersey, which will more than double its order capacity across the East Coast, the South and the Midwest. In the South, the startup recently expanded delivery to Arkansas, Mississippi and Louisiana, and in the Midwest it will launch delivery in Wisconsin, Minnesota, Iowa and Michigan.
Dive Insight:
Misfits Market bills itself as a company making access to fresh, healthy food more affordable while also helping to reduce food waste. The mission is particularly urgent amid the pandemic, the company said, with more Americans looking for ways to get affordable, fresh food in a safe manner.
Misfits started as a produce subscription service that made weekly deliveries of imperfect fruits and vegetables that might not appear on supermarket selling floors. The company, which raised $16.5 million in Series A funding a year ago, has expanded into grocery products, and currently offers around 100 SKUs of coffee, chocolate, oat milk and other products priced up to 50% below retail. It's also in the process of updating its website and app.
The startup received some recognition for its hiring efforts early in the pandemic. According to ABC 6 in Philadelphia, Misfits increased its hourly employee wage by $3 an hour while also hiring people who had recently lost jobs.
As food waste grows, companies have developed a range of strategies to combat it, from "upcycling" to employing artificial intelligence. According to a study by Future Marketing Insights, the food waste business was worth $46.7 billion in 2019 and is expected to grow 5% over the next decade. Misfits says it has "recovered" 40 million pounds of produce since it went into business two years ago.
Misfits competitor Imperfect Foods has also been working to recast itself as more than an ugly produce box. Following a rebrand last fall, the company raised $72 million in May to expand its operations.
Correction: A previous version of this story misstated the total amount of food waste Misfits Market claims to have diverted from landfills. It says it has “recovered” 40 million pounds of food over the past two years.
