Getting a group Bananas and avocados on sliced bread at 3 a.m. from your favorite 15-minute grocery delivery company might be the best thing, but some of these companies are getting into a bit of a cost-related pickle in a low-margin business.
While covering the recent news about Misfits Market’s acquisition of Imperfect Foods, Abhi Ramesh, founder and CEO of Misfits Market, stated that it is difficult to reach profitability in the industry as sales have declined in the last two years. Some companies have laid off employees or left the market due to “exorbitant cash burn and lack of capital raising.”
With online grocery shopping in the US poised to grow from a $95.8 billion industry by 2020 to a $187.7 billion industry by 2024, we explore whether other consolidation opportunities are in the pipeline as well as the future of IPOs for startups in this space.
Experts say grocery startups are keeping an eye on what happens with Instacart’s looming IPO as an indicator of additional public listings to come. But M&As can be part of the path to public markets: Ramesh, for example, says his company aims to go public. The Imperfect Foods deal is a strategy to reach profitability as a strong company.
Instacart has been in a buying mode lately. The delivery giant has acquired four companies in the past 12 months, including two in the past two weeks: Rossi, an e-commerce platform for local and independent retailers and wholesalers, and Eversite, an AI-powered pricing and promotion platform for packaged consumers. Commodity brands and retailers.