Yahoo Finance Farm-to-doorstep delivery app raises another £7m for expansion
Farmdrop, an app that lets customers order groceries from producers, has raised £7m to challenge on-demand offerings from supermarkets.
The online delivery start-up connects customers with farmers and manufacturers so they can order reasonably priced local goods while also making sure farmers receive 75pc of the retail price.
After growing sevenfold last year and with expected revenues of £3m this year, Farmdrop is hoping to use the cash to expand its offering across the UK. The service, launched in 2014, is currently only available in London, but is on track to start deliveries in Bristol from September.
Through the Farmdrop app customers can choose from a range of around 2,000 locally sourced products, from sustainable dishwasher tablets to eggs. The company alerts its 70 producers on what they need to supply every day around noon and then receives their deliveries and distributes it in packages to the customers.
Ben Pugh, Farmdrop’s founder and chief executive, said: “It’s a super low-cost model because we’ve taken all the stuff out of the middle and replaced it with a mobile app and a zero waste, zero storage model.”
At the moment Farmdrop works on a small scale and Mr Pugh admitted it could be difficult to scale the business. But he said the company has invested heavily in ensuring the model works as it grows and a significant portion of the funding will go toward improving customer experience.
“A lot of the technology we have been building is around making sure the market place functions perfectly as it scales,” he said. “That’s very complicated. There’s an actual chicken which is born before it can lay eggs or become a roast chicken on somebody’s table.”
The investment was led by the technology investment firm Atomico, previously a backer of Skype, the Clash of Clans makers Supercell and HailO, and brings Farmdrop’s total funding to date to almost £11m.
Niklas Zennström, co-founder of Skype and chief executive of Atomico, said the firm looked to invest in companies tackling “some of the bigger sustainability challenges our planet is facing”.
“We are incredibly proud to have led Farmdrop’s second investment round,” he said. “They are deploying innovative technology to simplify the food chain and meet the growing demand for more sustainably sourced, local food."
