Getting a bunch bananas and avocados from your favorite 15-minute grocery delivery company at 3 a.m. might be the greatest thing since sliced bread, but some of these companies find themselves in some kind of cost situation in a business with low margin.
While covering the latest news about Misfits Market acquires Imperfect FoodsMisfits Market founder and CEO Abhi Ramesh noted that it is difficult to achieve profitability in the industry because sales have stabilized over the past two years. Some companies made layoffs or exited the markets due to “burning a huge amount of cash and not raising capital.”
with online grocery shopping in the usa on track to be a $187.7 billion industry by 2024, up from $95.8 billion in 2020, we found ourselves in the process of exploring whether other consolidation opportunities are in the works, as well as the future of startup IPOs companies in this space.
Experts say grocery startups are keeping a close eye on what happens with Instacart impending IPO as an indicator of upcoming additional public announcements. But mergers and acquisitions may be part of the path to public markets: Ramesh, for example, said his company aims to go public. The deal with Imperfect Foods was a strategy to achieve profitability as one strong company.
Instacart itself has been in acquisition mode lately. The delivery giant has acquired four companies in the past 12 months, including two in the past two weeks: Rosiee-commerce platform for local and independent retailers and wholesalers, and Eversightan AI-powered pricing and promotions platform for consumer packaged goods brands and retailers.