Sustainability-focused online grocer Misfits Market is no misfit when it comes to raising venture capital, the eGrocery platform is quite popular. The company announced Tuesday (Sept. 14) that it has raised $225 million in its Series C-1 funding round, bringing its total funding to over $526 million, and its valuation to $2 billion.
With this latest fundraise, the company’s value has nearly doubled in the last five months — in April, Misfits Market announced a $200 million Series C round that brought its valuation to $1.1 billion, per PitchBook data.
The New Jersey-based firm, founded in 2018, focuses on selling sustainably sourced goods, including produce that is visually unappealing and products that are soon to reach their best-by date, and it promises lower prices than one would find at a brick-and-mortar grocery store. The company currently has a presence in 43 states.
The Context
The online grocery space has been expanding rapidly since the start of the pandemic, and noting this rise, investors have been quick to back businesses that offer promising solutions to make the challenging economics of the category work. Month after month, online grocers emerge with hundreds of millions more funding to capture consumers’ rising demand for bring-it-to-me convenience.
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A popular sub-category of online grocery has included sustainability-focused businesses such as Misfits Market and competitor Imperfect Foods and other options such as Market Wagon and Azure Standard.
What Consumers Are Saying
Consumer demand for online grocery is growing. PYMNTS’ survey of 5,200 consumers, published in our report The Bring-It-To-Me Economy, a collaboration with Carat from Fiserv, found 57% of consumers are now ordering groceries online, and 46% are doing so more often that before the start of the pandemic. These eGrocery shoppers skew younger. The portion of consumers who are of online grocery shoppers goes up to 63% for millennials and to two-thirds for Generation Z and bridge millennials.
Related news: New Study: Bring-It-To-Me Economy Ascends As Consumers Embrace Home-Centric Lifestyles
These younger consumers are significantly more likely than their older counterparts to seek out sustainability-focused options such as Misfits Market. A recent Deloitte survey finds more than a quarter of millennials rank environmental issues among their top personal concerns, above economic growth and personal safety, and 28% of Gen Z consumers said the same, ranking it above even employment and healthcare concerns.
What the Experts Are Saying
“I think back, pre-COVID, nobody woke up in the morning and said, ‘Oh, you know what I need? I need, I need a new grocery solution,’” noted Bentley Hall, CEO of Bay Area grocery and meal kit delivery company Good Eggs, in a recent interview with PYMNTS. “And in many ways, the pandemic forced or required everybody to ask that question. I don’t think that’s going to change — I think that question will be asked more and more frequently.”
As the online grocery space grows, there has also been, across industries, a turn toward paying attention to consumers’ environmental concerns.
“I’m feeling extremely optimistic about … the rallying of all of the different businesses and different business sectors,” Madeline Rotman, head of sustainability at Imperfect Foods, told PYMNTS, qualifying, “A lot of it is sort of a balance between what industry is leading and where regulation is enabling industries to lead.”
Read more: Good Eggs’ Grocery Delivery Expands the Concept of Local Eating
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