Farmdrop, the farmer-friendly online grocery platform based in the U.K., has picked up £10 million in new funding.
New investors in this Series B round include LGT Impact Ventures (described as a growth equity investor that invests in businesses making a positive contribution to society), and Belltown Ventures, a renewable energy investment specialist with an interest in agricultural technology.
Previous backer Atomico also followed on.Founded by ex-city broker Ben Pugh in 2014, Farmdrop originally launched as a ‘click and collect& service that let you order groceries online from farmer-producers to pick up at a local collection point.
However, the company has since pivoted to door-to-door delivery but with the same basic idea of a marketplace that bypasses the mass supermarkets.
It claims to give consumers much fresher produce, and farmer-producers a more generous share of the retail price.
Large supermarkets are known for squeezing suppliers in a bid to lower prices whilst maintaining their own profits, after all.&The fundamental problem is that the supermarket dominance over the last fifty years has put huge amounts of downward pressure on farmgate prices,& Pugh told me when Farmdrop raised its Series A.
&In this environment, the only option for producers has been to focus on yields and durability which has led to a big depreciation in the taste and nutritional quality of homegrown foods&.To that end, Farmdrop says it now sells over 2,000 products ranging from high-welfare meat, dairy, fish, organic fruit and veg, plus household supplies and larder items.
It says that 80 percent of its fresh produce is sourced directly from 208 &sustainable farmers and independent food makers& and that since 2014 the startup has generated over £5 million in revenue for small-scale British farmers.The new capital will be used to fund further U.K.
expansion after the successful launch of a second hub in Bristol and Bath in September 2017, in addition to London.
&Over the next six months Farmdrop will double the total number of households it can deliver to, initially growing in the South East but with plans for a northern hub in Manchester by end of 2019,& says the company.More broadly, Farmdrop is tapping the rise of online grocery — even if the offline to online switch is still happening quite slowly — coupled with a growing demand for high-quality produce that comes from a more ethical/sustainable supply chain (Farmdrop also uses electric vans for the last few miles of delivery).
It seems to be working, too: the startup says it is now on track to achieve £10 million in annualised revenues before the end of 2018.Adds Niklass Zennström, Skype founder and CEO of Atomico: &What we find so compelling about Farmdrop is the way they&re using technology for good.
By creating a direct route to market for farmers, Farmdrop is helping to create a healthier and more efficient supply chain.
We&re proud to invest in such a fantastic team and are excited about helping them scale their innovative e-grocery platform.&