Imperfect Misfits: Online Grocery Delivery Consolidation

Kevin LaBuz
7 min readSep 18, 2022

It’s always a good idea to have some dry powder. The Covid demand whipsaw coupled with souring investor sentiment is creating new opportunities for firms with financial flexibility. Below, a look at Misfits Market’s acquisition of competitor Imperfect Foods.

Betting Big on Blemished Bananas

Misfits Market is betting that blemished bananas will become a big business. The online grocer, which works directly with farmers and producers to source food that would otherwise be destined for the scrap heap, acquired competitor Imperfect Foods in an all-stock deal earlier this month. The combined entity is expected to have half a million subscribers and 3,000 employees. Terms weren’t disclosed, but are likely favorable to Misfits Market, which has raised over $500 million of venture capital and was last valued at roughly $2 billion, in a September 2021 Series C led by SoftBank.

The company was founded in 2018 by Abhi Ramesh. Before becoming an entrepreneur, Ramesh worked on an opportunistic investment team at Apollo. His experience there likely helped with the Imperfect Foods acquisition. Like its produce, the business has a few bumps and bruises.

While Imperfect Food’s financials aren’t readily available, what is public suggests a business in distress. The company has recently been plagued by high executive turnover. Current CEO Dan Park joined in January 2022. His predecessor, Philip Behn, was pushed out by the board in 2021 following layoffs and poor financial performance. In addition to Behn, Imperfect Food’s chief financial officer, chief product and growth officer, and chief merchandising officer all exited in 2021. Additionally, operational issues were rife. One in five orders had a customer service issue, like damaged or moldy food.

Ugly Produce 101

Imperfect Foods and Misfits Markets are both on a mission to build an affordable online grocery store while reducing food waste. Every year, between 30–40% of food produced ends up in landfills 5. Some never make it off the farm. Grocery stores have specifications for what they’re willing to sell: the size of an apple, the color of kale, the shape of a squash. They seek consistency. Grocery supply chains and stores are optimized to sell food that fits the spec. Yet many things can keep an apple out of a grocery store: too big, too small, minor blemishes, odd shapes or imperfections.



Kevin LaBuz

Head of IR & Corporate Development at 1stDibs. Previously finance at Etsy, Indeed, and internet equity research at Deutsche Bank. Find me on Twitter @kjlabuz.