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Farmdrop, a U.K.-based farmer-friendly online grocery platform, has gained £10 million funding in the recent Series B round. New investors include LGT Impact Ventures, and Belltown. Previous backer Atomico also followed on.
Farmdrop was originally launched as a ‘click and collect’ service that allows you to order groceries online from farmer-producers to pick up at a local collection point. Ever since, the firm has moved to door-to-door delivery but with the same basic idea of a marketplace that bypasses the mass supermarkets. Large supermarkets have been famous for squeezing suppliers in a bid to lower prices whilst maintaining their own profits. However, Farmdrop claims to give consumers fresher produce, and farmer-producers a more generous share of the retail price according to their business model.
“The fundamental problem is that the supermarket’s 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 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.
This new capital will be used to fund further expansion in the U.K. market after the successful launch of their second hub in Bristol and Bath in September 2017, in addition to London. The company claims, “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”.
Niklass Zennström, founder of Skype and the CEO of Atomico added: “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.”
Check out: Retail Tech Insights