Farmstead announced today that it has raised a $7.9 million Series A round of funding to accelerate its national expansion and recruiting. This brings Farmstead’s total funding to date to $14.5 million.
Farmstead’s business has grown swiftly in 2020, driven partially by shoppers’ preference for delivery over going to the store during the pandemic. Now, with stay-at-home orders lifting, Farmstead has found that the vast majority of customers are continuing to use delivery. 75% of Farmstead customers are on its free weekly recurring program, ensuring that they have a regular delivery slot each week, plus access to discounts on staples.
In October, Farmstead announced that it will be opening its first expansion market: Charlotte, North Carolina. On Nov. 17, Farmstead announced its second expansion market: Raleigh-Durham, North Carolina. Additionally, in September, Farmstead launched, to help traditional grocers take delivery in-house, and go head-to-head against Amazon’s national expansion. A Top 3 U.S. grocer has already implemented Grocery OS, and Farmstead is in talks with many others, including several of the nation’s Top 10 grocers.
Farmstead is known for leveraging proprietary AI technology and a dark store model; e.g., delivery-centric warehouses that serve a 50-mile radius, delivering many thousands of orders per day to maximize efficiency and reduce costs. As a result Farmstead offers consumers prices comparable to or lower than most supermarkets, but with free delivery to their doorsteps. The company is growing quickly, with plans to expand nationwide to a primarily mid-market audience.
Farmstead’s dark grocery store strategy greatly eases entry into new geographies, reduces food waste and helps eliminate food deserts by making fast, inexpensive delivery available to a wider area. Most of all, Farmstead meets customers’ desire for perfect orders with no stockouts, delivered free and with no markups.
“In order to fix grocery delivery and make it profitable, Farmstead took the bold approach of breaking the traditional model and starting completely from scratch, while opening up Grocery OS to other retailers,” said Tim Reynders of Aidenlair Capital. “There is an inevitable path to growing an impactful and powerful company, and we see that potential with Farmstead–we’re excited to work with Pradeep, Kevin and team to grow the company nationwide.”
“The Farmstead team worked hard in 2020 to perfect the dark store model and the underlying proprietary technology that makes Farmstead so incredibly efficient,” said Pradeep Elankumaran, co-founder and CEO of Farmstead. “We are laser focused on expanding Farmstead’s national brand and adding more partnerships with grocery chains, helping them increase their daily delivery capacity while driving long sought-after profitability with each order. This industry has been stagnant for long enough–customers demand change and we are building the foundation for sustained e-commerce growth in grocery while exceeding their expectations.”