Venture capital firm Insight Partners was moved to invest in and lead a $72 million Series C funding round for Imperfect Foods by the customer loyalty the start-up has managed to attract.
“Imperfect Foods is tackling a huge environmental problem of food waste and, as a result, has incredibly loyal and impassioned customers,” said Insight managing director Adam Berger. “When you’re solving a real problem that people care about, you tend to have a lot of pent up demand that results in brand loyalty.”
Imperfect Foods was founded in 2015. The start-up seeks to reduce food waste by acquiring produce that is misshaped or scuffed and would be unfit for retail sales, and directly delivering to customers with up to 30 percent price discounts.
The company currently operates in 38 states across the US and will use its latest funding round – it has raised $119 million to date – to expand in the country, increase capacity in new and existing fulfillment centers, and enhance technology to connect producers, farmers and customers.
Berger said Imperfect Foods falls in line with Insight’s other consumer investments because it is a “category leader” in a fast-growing market. The firm was also an early stage investor in other food delivery and e-grocery start-ups, such as Delivery Hero and HelloFresh.
“With [ready-made meal delivery service] Freshly and now Imperfect Foods in our portfolio, you’ll notice that each of these businesses have an enormous addressable market by offering a quality, affordable experience, coupled with the convenience of direct-to-consumer,” Berger said.
Insight was joined in the funding round by Norwest Venture Partners, among others. Specific investment sizes were undisclosed.