June 11, 2020

By Lynda Kiernan, Global AgInvesting Media

Insight Partners has led a $72 million Series C for Imperfect Foods to support the company in improving the food supply chain and reducing food waste. The round was also supported by existing company investors including Norwest Venture Partners, that led its Series B.

Originally founded in 2015 under the name Imperfect Produce, Imperfect Foods rebranded and adopted its current name in October 2019 to reflect its broader mission of having a positive effect on all food supply chains.

What began as a solution to the problem of farmers not being able to market up to a third of their crop due to aesthetic requirements of retailers, Imperfect Foods soon realized that their mission could expand to address the need to recover other types of foods beyond fresh produce that perhaps don’t get the attention that the loss of fresh produce does.  

“The more we learned about food waste in America, the more we understood that it wasn’t just the produce aisle that was ripe for change,” stated the company in a statement released through Medium in September 2019.

“As Imperfect Foods, we’re working to rethink the entire grocery store, one aisle at a time, and get our customers the groceries that they know and love in a way that reduces food waste and helps farmers and producers make a better living.”

Up to 40 percent of food produced, processed, and transported in the U.S. ends up never being eaten, according to Feeding America, and more food finds its way to landfills and incinerators than any other type of municipal solid waste. This loss represents a fiduciary hit of $218 billion to U.S. farmers, businesses, and consumers each year, according to ReFED, which also found that 20 billion pounds of food is lost at the farm level each year. Of this loss, the Natural Resource Defense Council estimates that between 10 and 30 percent is discarded due to its appearance.

Solving issues associated with agricultural and food waste is becoming a more common theme among agtech and food tech startups and their investors, not only in the U.S., but in global markets, as the stakes of not doing so become increasingly critical.

This urgency drew the attention of NBA All-Star Kevin Durant, whose investment fund Thirty Five Ventures made an undisclosed investment in the company in October 2018. Other previous investors include Maveron, Shasta Ventures, Flybridge, and Corigin Ventures, who together with this latest round that included Norwest Venture Partners, bring total funding for the company to $119 million to-date.

Today, the company has secured another $72 million that will be used to fund the continued expansion of its grocery delivery service across the U.S., to increase its capacity in new and existing fulfillment centers, and to expand its offerings and enhance its technology to better connect producers, farmers, and customers to its mission: to eliminate food waste and build a better food system. 

“We’re energized by the continued support from investors as we eliminate food waste and build a better food system for everyone,” said Philip Behn. CEO, Imperfect Foods.

“We’re illuminating vast vulnerabilities within our food supply chain and increasing access to fresh and affordable groceries. The partnership with Insight Partners comes at a unique moment – our model has not wavered in the time of COVID-19 and we’ve accelerated our roadmap as a result,” continued Behn.

“This highlights how, even during times of unfathomable global hardship, we are an essential part of the safety net for hundreds of thousands of customers across the country.”

Over the past year Imperfect Foods has experienced growth across multiple facets of its business including the doubling of its average order size year-over-year, the doubling of its weekly order volume since January, a wider product assortment, and a growing customer base. Riding this wave, the company is on pace to reclaim more than 200 million pounds of food from going to waste in 2020.

As we see the effects of COVID-19 play out on food supply chains and traditional food retail frameworks, the role that Imperfect Foods can play in mitigating food waste and in keeping consumers connected to food supply systems is key.

“The grocery industry has been evolving for years, yet this particular moment highlights an urgent need to reinvent our food supply chain with innovative technology, and keep people safe,” said Adam Berger, managing director at Insight Partners, who will be joining the Board of Directors at Imperfect Foods.

“Imperfect Foods plays an integral role in this industry, merging a clear social mission with affordability and convenience. We’re excited to work closely with the team as they enter this monumental phase of growth, and push the industry towards a more intentional and efficient food system.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.