Finding a collection Bananas and avocados may be the biggest thing since sliced bread at 3 a.m. from your favorite 15-minute grocery delivery company, but some of these companies are finding themselves in low-margin businesses tied to price.
In reporting the recent news of Misfits Market’s Imperfect Foods acquisition, Misfits Market founder and CEO Abhi Ramesh noted that profitability has been difficult to achieve in the industry as sales have declined over the past two years. Some companies have laid off or exited the market due to “burning too much cash and not raising capital.”
With online grocery shopping in the US poised to become a $187.7 billion industry by 2024, worth over $95.8 billion, we find ourselves wondering whether other consolidation opportunities are underway, as well as the future of IPOs for startups in this space.
Experts say the additional public details are an indication that grocery startups will continue to keep an eye on what happens with Instacart’s looming IPO. But M&As can be part of the path to public markets: Ramesh, for example, said his company is aiming to go public. The Whole Foods deal was a strategy to gain profitability as a strong company.
Instacart itself has been in shopping mode lately. The shipping giant has acquired four companies in the past 12 months, including two in the past two weeks: Rosie, an e-commerce platform for local and independent retailers and wholesalers, and Eversight, an AI-powered pricing and advertising platform for packaged consumers. Commodity brands and retailers.