Misfits Market, the ecommerce platform that sells ‘ugly’ produce (among other things), has today announced the close of an $85 million Series B financing round. The funding was led by Valor Equity Partners, with participation from Greenoaks Capital, Third Kind Venture Capital, and Sound Ventures.
Misfits Market started out as a subscription box that allowed folks to buy ugly or misshapen product on the cheap each week. This product would have been thrown out at the farm, before ever heading to a distributor or grocery store, because it usually goes to waste sitting on a grocery store shelf.
There’s nothing actually wrong with this produce, except for the fact that shoppers wouldn’t normally choose it from a pile of fruit or vegetables that look more pleasing.
Since raising its Series A, Misfits Market has been working to expand its selection, which now includes chocolate, snacks, chips, coffee, herbs, grains, lentils, sauces and spices. Users can add these products to their usual weekly produce box on an a la carte basis, and they’re priced 20-25 percent below retail. These products are available to ‘add to box’ once a week (on Thursdays).
For the first few months it was operating, Shelf Engine, the Seattle-based company that optimizes the process of stocking store shelves for supermarkets and groceries, didn’t have a name.
Co-founders Stefan Kalb and Bede Jordan were on a ski trip outside of Salt Lake City about four years ago when they began discussing what, exactly, could be done about the problem of food waste in the U.S.
Kalb is a serial entrepreneur whose first business was a food distribution company called Molly’s, which was sold to a company called HomeGrown back in 2019.
While running Molly’s, the Seattle-based ready meal wholesaler he founded, Stefan Kalb was upset about its 28 percent food wastage rate. Feeling that the amount was “astronomical,” he began researching how to lower it — and was shocked to discovered Molly’s was actually outperforming the industry average. Confronted by the sheer amount of food wasted by American retailers, Kalb and Bede Jordan, then a Microsoft engineer, began working on an order prediction engine.
The project quickly brought Molly’s percentage of wasted food down to the mid-teens. “It was one of the most fulfilling things I’ve ever done in my career,” Kalb told TechCrunch in an interview. Driven by its success, Kalb and Jordan launched Shelf Engine in 2016 to make the technology available to other companies. Currently participating in Y Combinator, the startup has already raised $800,000 in seed funding from Initialized Capital, the venture capital firm founded by Alexis Ohanian and Gerry Tan, and is now used at more than 180 retail points by clients including WeWork, Bartell Drugs, Natural Grocers and StockBox.