The Philadelphia area is losing a unicorn as Misfits Market has relocated its headquarters to Maryland after trimming a large chunk of its workforce and closing its South Jersey facility.
The Philadelphia-born grocery delivery startup was founded by University of Pennsylvania alum Abhi Ramesh in 2018 and later moved outside the city to Delanco, New Jersey. It reached a $2 billion valuation in 2021 and acquired one of its main competitors in September. Now, just months after undergoing a companywide consolidation that saw it lay off nearly 450 New Jersey workers, the company's official headquarters have shifted to its distribution site outside of Baltimore. Most of its corporate employees work remotely.
"While Abhi still calls Philadelphia home, the company's HQ has shifted to our facility in Hanover, Maryland. As a company, we are a fully distributed team and don't have any official offices outside our five warehouse facilities," said Ken Shuman, a spokesperson for Misfits Market.
Misfits Market's move drops it off of a rather short list of startup unicorns in the Philadelphia area, a list that includes Gopuff, dbt Labs and Phenom. A unicorn is commonly defined as a privately held startup with a valuation over $1 billion.
In February, Misfits Market shuttered fulfillment centers in Salt Lake City and Dallas, along with the Delanco location which had been open since 2020. It resulted in a total of 649 layoffs nationwide, or about 33% of the company's headcount. That workforce reduction was preceded by Misfits Market's acquisition of Imperfect Foods, the company's primary competitor in the "ugly" grocery delivery space.
Misfits Market launched in North Philadelphia in 2018 as a subscription box service that partners with farms to rescue organic, oddly shaped fruits and veggies typically rejected from grocery stores and deliver them to customers’ doorsteps. The company expanded its product offerings and quickly grew to a valuation in the billions. Misfits Market had raised more than $526 million in funding, including a $225 million Series C-1 in September 2021, prior to its acquisition of Imperfect Foods. It now delivers in all states except Hawaii and Alaska.
Ramesh previously told the Business Journal that an IPO could be possible in 2024.
Though business taxes can be a factor in companies leaving highly-taxed areas like New Jersey or Philadelphia, Misfits is not necessarily moving to a tax-friendly state. According to the Tax Foundation, New Jersey is the worst state for business taxes, with Maryland slightly ahead at No. 46. The Garden State has a corporate tax rate of 11.5% for businesses with income over $1 million, compared to Maryland's corporate tax rate of 8.25%.
