Misfits Market, a platform that redistributes irregular or blemished organic fruits and vegetables at a discounted price, has announced plans to acquire Imperfect Foods, a California-based online platform for redistributing food, in an all-stock deal. The deal is subject to regulatory approval and closing conditions, with the financial terms not disclosed.

The acquisition is expected to support Misfits Market in reaching its goal of USD 1 billion in sales and achieving profitability by early 2024. It will also bring in financial and cultural synergies given that both companies focus on eliminating food waste, have a combined funding of USD 736 million, and have collectively redistributed almost 500 million pounds of food waste.

The deal is due to be completed within two years, where Misfits CEO Abhi Ramesh will serve as the CEO of the combined company and executives from Imperfect Foods will join Misfits leadership team. Post-acquisition, Misfits Market and Imperfect Foods will merge into a single entity aiming for a common goal. 

Misfits also reported that it plans to go public once it reaches profitability in order to compete with incumbent players in the space.

Analyst QuickTake: Misfits Market and Imperfect Foods are the top two funded startups in our Redistribution segment in the Food Waste industry hub. Misfits Market is likely to capture a larger share of the redistribution market by consolidating its business with Imperfect Foods. Prior to this acquisition, Imperfect Foods had also strengthened its C-Suite team to drive its e-commerce business and was looking to further develop its business by partnering with New Belgium Brewing to launch a beer brand made from imperfect oranges.