Misfits Market Secures $200 Million in Series C Funding

Misfits Market, the company recognized for offering discounted, cosmetically imperfect produce, has announced a successful $200 million Series C funding round this morning.

This investment elevates the company’s total funding to $301.5 million, propelling its valuation to over $1 billion – achieving “unicorn” status. While the precise valuation remains undisclosed, reports from Bloomberg suggest a figure of $1.1 billion.

Expansion Beyond Produce

According to Founder and CEO Abhi Ramesh, the Delanco, New Jersey-based company has broadened its product range beyond fruits and vegetables to encompass a wider variety of grocery items.

Despite this expansion, Ramesh emphasizes that all offerings are unified by a core principle: delivering exceptional value to customers.

The Value Proposition

Misfits Market products are available at discounts of up to 40% compared to traditional grocery stores, both physical and online.

This cost reduction is achieved by sourcing products that conventional retailers decline to purchase or sell, often due to seemingly minor issues. Ramesh cited a recent example of acquiring 50,000 bottles of high-quality olive oil simply because the labels were misaligned.

Significant Growth and Operational Advantages

The company reports a fivefold increase in its active customer base and order volume over the past year, having shipped 77 million pounds of food to over 400,000 customers.

Meeting this surge in demand presented challenges, including the temporary implementation of a waitlist, but Misfits Market possessed operational advantages over many competitors.

“Because we operate our own fulfillment centers and have developed proprietary technology, we weren’t subject to the same limitations as brick-and-mortar stores,” Ramesh explained. “These stores face constraints like closing hours and the need to accommodate in-store shoppers and delivery services.”

Scaling fulfillment center capacity, while demanding, proved more manageable for the company.

Investment Details and Board Addition

The funding round was spearheaded by Accel and D1 Capital, with contributions from Valor Equity Partners, Greenoaks Capital, Sound Ventures, Third Kind Ventures, and others.

Ryan Sweeney of Accel will be joining Misfits Market’s board of directors.

“While direct-to-consumer food models are not novel, Misfits Market’s approach is unique,” Sweeney stated. “They’ve successfully created a solution that benefits both consumers and food suppliers across the supply chain.”

Future Plans: Expansion and Reach

The newly acquired funding will be used to further expand into new grocery categories and geographic regions.

Today marks the beginning of service to customers in Oregon and Washington, and Ramesh’s objective is to provide shipping coverage to “100% of ZIP codes in the 48 contiguous states” within the next 12 months.