DELANCO, NJ. — Online grocer Misfits Market has announced a $200 million Series C funding round co-led by Accel and D1 Capital, with participation by existing investors, including Valor Equity Partners, Greenoaks Capital, Sound Ventures, and Third Kind Ventures.
Misfits Market is a direct-to-consumer grocery platform tackling food waste by offering imperfect or surplus produce and pantry staples at lower costs. The oversubscribed round brings the company’s total funding to $301.5 million. Misfits Market plans to use the proceeds from the latest round to expand distribution with the goal of eliminating food deserts in the United States by 2025. Ryan Sweeney, partner at Accel, will join the Misfits Market board of directors.
As the pandemic triggered shockwaves through the food supply chain, Misfits Market tripled its farmer and supplier relationships to rescue food and prevent significant losses for producers. Efforts included sourcing from suppliers to restaurants, theaters, sports stadiums and schools to repackage and sell products such as bulk popcorn kernels directly to consumers.
The company’s active customers and order volume grew fivefold last year, as it shipped more than 77 million lbs of food to more than 400,000 customers nationwide. The rapid growth has continued into 2021; the company said it has saved the same amount of food in the first four months of the year as it did in the entirety of 2020.
"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," said Abhi Ramesh, founder and chief executive officer of Misfits Market. "With this capital infusion, we plan to complete our expansion to the West Coast and continue to expand the selection of organic produce and high-quality, sustainably-sourced proteins and pantry items, getting us one step closer to our mission of making sustainable and affordable food accessible to every community across America."
Misfits Market closed an $85 million Series B funding last summer. Since then, the company has expanded its geographic footprint, increased delivery capacity and launched new offerings, including an assortment of sustainably produced meats, poultry and seafood.
The company plans to double its current team of more than 1,000 employees in the next year across all teams, including product, engineering, marketing and operations.
“Direct-to-consumer models aren't anything new in the food industry, but the approach Misfits Market has taken is," Mr. Sweeney said. "Instead of focusing only on their end customer, they've managed to create a dynamic solution that also supports food suppliers at every level."