A startup that delivers groceries straight from the farm to your door has raised a fresh £10m Series B investment round from the likes of Impact Ventures, Atomico and Belltown Ventures.
Farmdrop, which seeks to undercut supermarkets and delivery rivals like Amazon and Ocado in a bid to get healthier, local food on our tables, has now raised over £20m to date.
Launched by ex-City broker Ben Pugh in 2014, Farmdrop wants to use the funding to further its expansion both inside London and elsewhere in the UK, after it used its Series A round last year to create new hubs in Bristol and Bath.
But profitability is also on the startup’s mind, as Pugh aims to challenge the stereotype of tech firms falling into the trap of profitless growth.
Speaking to City A.M., Pugh said:
We’re purposefully trying to be a good example of what happens if you mix an awesome socially and environmentally positive mission, with growth capital.
It’s not how I was brought up. I started life at PwC and then went into investment banking, and moving past internal profitability milestones is really important if we believe we’re going to have a seat at the table for meaningful growth in businesses.
Farmdrop sells over 2,000 products ranging from meat and dairy, to household and larder supplies.
Importantly, it makes sure its customers get the freshest local supplies, while paying its farmers at least 70 per cent of the purchase price.
Average sales for its most popular producers were £140,000 in its most recent financial year, which is a more than double the average wage before costs for UK farmers.
Over the next six months, Pugh says the firm will double the total number of households it can deliver to through geographic expansion in the South East, with plans to open up in Manchester by the end of next year.
“The key message in what this round represents is that we’re only really just getting going,” Pugh added. “But London is still our home market, and still our focus, because it’s also home for me and my team.”