Online grocery platform Misfits Market, founded in 2018 by Under 30 honoree Abhi Ramesh, announced today that it has raised a $200M Series C, thus becoming a unicorn (the company didn’t disclose the post-round valuation). The funding round was 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 e-commerce platform which buys produce from farmers that couldn’t be sold to stores for a bunch of very aesthetic reasons (produce that is too big, too small, shaped a little bit weird or has discolorations) and sells it to subscribers on its platform at a discounted price.
“The reasons why stores won’t accept that produce on their shelves are often very irrational,” Ramesh, founder and CEO, says. “Recently we got a call from olive oil manufacturers who said that they had 50,000 cans of olive oil and the only thing that was wrong with it was the label was upside down.”
The way Misfits Market operates is by sending weekly refrigerated trucks to farmers to pick up food which the farmers know wouldn’t be acceptable to grocery stores, which gets brought to the Misfits Market warehouse where it gets sorted. The company receives the orders via its platform and partners with carriers that deliver that to customers doorsteps over night.
The revenue model is such that the company charges a weekly subscription fee (as low as $22 per week small box and $34 for a large box), and the customers additionally pay for however much produce they decide to order (according to Ramesh, they are 20%-50% cheaper than a brick and mortar store).
Founded just two and a half years ago by Penn grad Ramesh, the company has passed the 9-digit in annual revenue threshold, grew 5x YoY from 2019 to 2020, and it serves 400,000 customers every month over 37 states. It operates from two warehouses and is in the process of launching a third one soon, offering almost half a million square feet of refrigerated square space across the country.
Misfits Market produce
Misfits Market
Ramesh, whose family immigrated from Chennai, India and made last year’s Under 30 Social Entrepreneurs list previously worked at Apollo Global Management. He got the idea to start this company when he was driving out of Philadelphia to farms in eastern Pennsylvania where theres a lot of farms. Ramesh would buy produce from these farmers, bring it to my apartment and fulfill orders out of his apartment.
“From the beginning the goal was not to be a produce delivery service, the goal was to be a grocery store online,” Ramesh says.
The Philadelphia-based company currently employs over 1000 people. With the latest $200 million Series C, the amount of equity financing in the company since its inception totals just over $300 million.