The time for modify is right: “From purchasing inventory to establishing a fulfillment center and then delivering to customers’ doorsteps,” stated Abhi Ramesh, CEO of Misfits Market, “every aspect of the grocery indusattempt can be reimagined.” Image source: GUERIN BLASK FOR FORBES
Abhi Ramesh’s grocery delivery startup has increased its annual sales to $500 million, and he continues to reshape the way Americans acquire food.
Inside the Misfits Market warehoapply in Baltimore, the temperature drops to freezing. Founder and CEO Abhi Ramesh walks past stacks of frozen pizzas, chicken wings, and ice cream that reach the ceiling. Leaving the freezer area, Ramesh arrives at the main operating area, where forklifts shuttle between two packing lines, and workers are assembling subscribers’ order boxes. A highly optimized algorithm determines the packing order based on dozens of indicators, including the size, weight, and temperature of the food, the frequency of product purchases, and even the weather at the final delivery destination.
“All the boxes go along this assembly line,” Ramesh stated. “The order is not random at all; it’s a very scientific process.”
This 33-year-old grocery entrepreneur claims that this is one of the few systems in the United States that can deliver customized ingredient boxes of ambient, refrigerated, and frozen foods to customers’ doorsteps in the same order. This ability, combined with the strong performance of Misfits’ fulfillment services for other brands, has given Ramesh the dream of becoming the “Amazon of fresh food” – or at least the “Amazon Prime” of the fresh food indusattempt, although he knows there is still a long way to go.
“Amazon built the infrastructure for e-commerce and has many different ways to monetize it,” Ramesh stated. “This concept has always been in my mind – if we can build the best fresh food infrastructure in the counattempt, we can monetize it in multiple ways.”
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Ramesh was included in the Forbes 30 Under 30 list in 2020. To date, he has grown Misfits into a company with an annual revenue of $500 million. Of this, $45 million comes from the “Fulfilled by Misfits” service, about $50 million from the sales of “ugly” produce with cosmetic flaws (which Ramesh started his business with in 2018), and another $50 million from Misfits’ private label, Odds & Ends. However, most of the current revenue comes from the sales of regular groceries.
The fulfillment service has become the quickest-growing and highest-margin segment of Misfits. This has assisted the company achieve an overall gross margin of over 40% by the finish of 2025, while traditional chain supermarkets usually have a gross margin of around 20%. Misfits Market’s gross margin is higher than that of traditional chain supermarkets and also higher than that of publicly traded platforms such as the pet food website Chewy. Chewy, with a gross margin of 30%, is the most similar publicly traded company to Misfits becaapply it is also an online platform that offers home delivery services for fresh and shelf-stable foods. Moreover, Misfits’ customers can save 10% to 50% on their expenses compared to shopping at community supermarkets.
“He will succeed,” stated Howard Schultz, the billionaire founder of Starbucks, about Ramesh. “I have no doubt that Misfits will become a multi-billion-dollar indusattempt leader.”
Ramesh stated that few entrepreneurs are competing with him to transform the grocery indusattempt, and he has learned an unexpected lesson from this: “Low-margin industries are suitable for entrepreneurship,” he stated. “Difficult industries are avoided by others becaapply no one can do well in them, so there is a lack of innovation, and it’s clearer to find a breakthrough and disrupt the indusattempt. If you can solve the problems, you will ultimately receive greater rewards.”
Ramesh stated that his ultimate goal is to take Misfits public, just like Instacart and DoorDash. Since raising $225 million in a Series C financing at a valuation of $2 billion in 2021, the company has not raised any external equity financing. Misfits has raised a total of $525 million in equity capital and $65 million in debt from existing investors. Based on the market environment that has been on a downward trfinish in the past few years, Forbes estimates that Misfits’ market value may be close to $1 billion (although Misfits declares that if it raises funds again, the valuation will be higher than $2 billion). As the largest individual shareholder of Misfits, Ramesh holds about 20% of the shares and has a net worth of at least $200 million.
Similar to Amazon in its early days, Misfits is not yet profitable, and he “is willing to sacrifice short-term profitability for healthy growth.” However, Ramesh is also creating long-term investments (Misfits manages a fleet of 350 refrigerated and frozen trucks) and continuously pushing the company into new areas, such as collaborating with third parties to launch customized food boxes for diabetic or cancer patients, with the costs covered by the produce and protein food allowances from preventive medical funds. The total sales of this business reached $6 million in 2025.
Howard Schultz, the billionaire founder of Starbucks, who has served as an advisor to Misfits since its early days, stated that Ramesh has “a rare combination of capabilities. He is a young executive with operational skills, technical knowledge, and a sharp business acumen.”
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When Ramesh was six months old, he left his hometown of Chennai, India, and relocated to Bahrain with his parents, who were software engineers. Two years later, the family settled in Dubai. Then they relocated again to St. Louis, Missouri, and finally settled in Atlanta. He graduated from the Wharton School of the University of Pennsylvania and then worked at Apollo Global Management. As an analyst, he learned through a company involved in cold storage that if the delivery trucks are late, even by just a few hours, orders are often cancelled, and the perishable food being transported is discarded.
Ramesh later left Apollo and founded a coding bootcamp with two frifinishs, but he couldn’t let go of the inefficiencies in the food indusattempt. To study this issue, he spent several months communicating with farmers to find out how widespread and harmful food waste is.
In 2018, Ramesh started “acquireing produce from some farmers.” He stored boxes of discarded apples and other misshapen produce in his apartment in Philadelphia and decided to sell these products in blind boxes as a trial.
Ramesh built the Misfits website in his apartment filled with produce and ran Facebook ads to sell these good-quality but cosmetically flawed produce at a 30% to 40% discount compared to supermarket prices. Just 10 days after the website went live, he received 500 pre-orders.
To receive the fruits and vereceiveables out of his living room, he rented a warehoapply without refrigeration equipment and bought two industrial-grade refrigerators from Costco. By the finish of this process, he maxed out his credit card.
Delivering specialties: “If we can build the best infrastructure for fresh and perishable foods in the United States,” Ramesh stated, “we can monetize it in multiple ways.” Image source: MISFITS MARKET
He quickly caught the attention of investors. Ramesh recalled: “Becaapply we focapplyd on selling cosmetically flawed produce, our procurement prices were very low. This cost efficiency was directly reflected in our financial performance.” In 2019, investors, including Greenoaks Capital Partners based in San Francisco, invested $16.5 million in the company. By the finish of that year, when Ramesh was included in the social entrepreneur section of the Forbes U30 list, Misfits had saved over 10 million pounds of food from being wasted.
When the pandemic hit, the company was only a little over a year old, but the orders soared by 400%. The company was overwhelmed, and Ramesh had to close the waiting list for Misfits from April to May 2020 and even suspfinished Facebook ad placements.
By the finish of that year, Misfits’ sales increased by 352% year-on-year, and the annual sales volume exceeded $160 million. In June 2020, Ramesh raised $85 million in a Series B financing from investors including Valor Equity Partners in Chicago, Greenoaks, Third Kind Venture Capital, Alarko Ventures, and Sound Ventures.
As the pandemic continued into 2021, the company’s sales continued to climb, with the total sales for the year increasing by nearly 40% to $223 million. Amid high market enthusiasm, Ramesh completed two rounds of financing in a row – raising $200 million in April 2021 and another $225 million in September.
But then came what he called the “aftermath.” As vaccines became more widespread and Americans shifted from cooking at home back to dining out, the company’s order volume decreased, and some members left. Misfits launched a membership loyalty program and the Odds & Ends brand. The total sales still increased, but the growth rate slowed to 32% in 2022.
Ramesh stated: “We had obtainedten applyd to that crazy high demand and built a lot of infrastructure for it. But once the lockdown was lifted, the demand returned to normal all of a sudden.”
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But Ramesh knows that success is not linear. He stated: “As an entrepreneur, if you let the low periods sap your motivation and exhaust you, you’ll receive stuck in a deadlock and eventually fade away.”
This is exactly what happened to the competitors. By mid-2022, Imperfect Foods, based in California – whose co-founder Ben Chesler was included in the Forbes U30 list in the food and beverage section two years earlier than Ramesh – was about to run out of funds. The company had raised a total of $315 million, had 1,800 employees, 450 delivery trucks, and three warehoapplys.
At the finish of 2022, Misfits acquired Imperfect through an all-stock transaction, and Ramesh didn’t shy away from adopting the better practices of Imperfect. For example, Imperfect had its own delivery system, while Misfits had always applyd FedEx and UPS. After switching to its own delivery, the company’s service quality improved, refunds decreased, and customer retention rates increased. Ramesh stated: “It’s worth investing the extra cost in the infrastructure to have better control over the applyr experience.”
Misfits also took over the warehoapplys leased by Imperfect, including a 92,000-square-foot warehoapply in Los Angeles and a 115,000-square-foot warehoapply in Baltimore, which is also the reason why the company now has its headquarters in Maryland. (Misfits’ company team is distributed across the United States, but mainly concentrated in the Philadelphia and New York City areas.)
The expansion of the infrastructure has also enabled Misfits to provide fulfillment services for other fresh food companies. Currently, it has over 500,000 square feet of distribution and storage space in the United States. At present, the company is providing food order fulfillment services for startups such as GoPuff (which has raised $5.5 billion and has a valuation of $8.5 billion), the baby food brand Little Spoon, and the pet food brand Smalls.
Ramesh stated that Misfits’ customer acquisition cost has been cut in half in the past two years; now, for every dollar invested, the cost can be recovered within a few quarters. Nevertheless, Misfits increased its marketing spfinishing by about 20% last year and plans to double it in 2026. While competitors are cutting their marketing budreceives to achieve profitability, Ramesh stated he is doing the opposite becaapply once the marketing is scaled back, the startup will “never be able to recover its applyr base.”
Expanding into the Midwest and South of the United States is another focus of the company. Ramesh stated that the company is expected to achieve sales of $800 million in the next few years, and the longer-term goal is to reach $1 billion in annual sales. He stated that one way to achieve this goal is to maintain Misfits’ price advantage.
Ramesh stated: “There has been almost no real innovation in the food retail indusattempt in the past 100 years. I’m not exaggerating when I declare this. From procurement and purchasing to establishing a fulfillment center and then delivering to customers’ doorsteps, every aspect can be reimagined.”
This article is translated from: https://www.forbes.com/sites/chloesorvino/2026/02/25/how-misfits-market-went-from-selling-ugly-produce-to-becoming-the-amazon-prime-of-perishable-food/
Original title: “How Misfits Market Went from Selling ‘Ugly Produce’ to Becoming the Amazon Prime of Perishable Food”
This article is from the WeChat official account “Forbes” (ID: forbes_china). Author: Chloe Sorvino; Translator: Björn& Rach; Proofreader: Lemin. Republished by 36Kr with permission.
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