Grocery delivery startups with low margins can give up their IPO dreams into reality M&A • TechCrunch

Catch a bunch bananas and avocados from your favorite 15-minute grocery delivery company at 3 a.m. may be the best thing since sliced ​​bread, but some of these companies are struggling on costs. in such a low-margin business.

During the recent coverage of Misfits Market Acquires Imperfect FoodsFounder and CEO of Misfits Market, Abhi Ramesh notes that it is difficult to achieve profitability in the industry because Sales have stagnated for the past two years. Some companies have implemented layoffs or left the market due to “burning a large amount of cash and not raising capital”.

With online grocery shopping in the US poised to be a $187.7 billion industry by 2024, up from $95.8 billion in 2020, we explored for ourselves whether other possibilities of consolidation are in the pipeline. implementation or not, as well as the future of IPOs for startups in the field.

Grocery startups are watching closely what happens to Instacart’s, experts say IPO coming soon as an indicator of upcoming additional public listings. But M&As could be part of the road to the mass market: Ramesh, for example, said his company wants to list shares. The Imperfect Food Deal is a strategy for achieving profitability as a strong company.

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Instacart itself was recently in acquisition mode. The delivery giant has acquired four companies in the past 12 months, including two in the past two weeks: Rosiean e-commerce platform for local and independent retailers and wholesalers, and Foresightan AI-powered pricing and promotion platform for brands and retailers of packaged consumer goods.

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