If and when the deal closes, the combined company will aim to deliver a more sustainable grocery experience, putting the business on track to cross $1 billion in sales and reach profitability by early 2024, according to a news release from Misfits.
Founded with the goal to build a better food system, Imperfect Foods sells products made from ingredients that would otherwise be wasted. It also brings "sustainably designed" delivery networks to the Misfits Market banner, per the release.
Misfits Market hopes the acquisition will help it continue building out a supply chain that tackles inefficiency, lowers prices and continues to improve how consumers shop for groceries online.
While the brands will continue separate operations in the short term, Misfits Market founder and CEO Abhi Ramesh will serve as CEO of the combined company, with executives from Imperfect Foods joining the Misfits leadership team.
“We have a tremendous opportunity to advance the shared mission of both brands, which is nothing less than a fundamental reimagining of both the grocery category and the broken U.S. food system,” Abhi Ramesh, CEO and founder of Misfits Market, said in a news release. “The strengths of the Imperfect Foods organization, from its in-house delivery fleet and robust private label program to its sustainability commitments and innovation, add immediate scale and depth to what we’re building at Misfits Market.”
“Scale matters in grocery, and this combination makes us a truly meaningful disruptor in the space,” Imperfect Foods CEO Dan Park, said in the release. “Both organizations have made significant progress as individual brands — together we have already rescued nearly 500 million of pounds of food that may otherwise have gone to waste, and driven innovation in a category propped up by antiquated technology and thinking. The combined experience and expertise of this newly merged team will exponentially increase our ability to take on established players in the traditional grocery space.”
In the U.S., food waste is estimated as 30%-40% of the food supply, according to stats cited by Misfits. With climate change increasingly impacting the food ecosystem, the gaps and inefficiencies in an outdated grocery supply chain can drive up prices and increase already high levels of waste. Misfits Market and Imperfect Foods' models aim to combat these issues and deliver a better food system for farmers, suppliers and customers across the country.
Wilson Sonsini Goodrich & Rosati is serving as legal advisor to Misfits Market. Solomon Partners is serving as Imperfect Foods' exclusive financial advisor, and DLA Piper is serving as its legal advisor.