US digital grocer Farmstead has raised $2.2 million from a funding round as it targets accelerated geographic expansion.
Bay Area-based Farmstead claims to be “the nation’s first AI-powered digital grocer that sources and delivers fresh, local food from farm to fridge in 60 minutes”.
The firm has secured funding from Artis Labs, Resolute Ventures, Y Combinator and Red Dog Capital, among others, bringing the total it has raised to date to $7.5 million.
Operating since 2016, Farmstead’s AI-powered predictive analytics models help it predict demand and supply accordingly, and deliver orders of local products in less than an hour.
The company said its customer base has been growing at a rate of 20% to 30% month-over-month.
“Farmstead is turning the grocery game on its head, leveraging technology to obtain huge efficiency gains,” said Stuart Peterson, founder of Artis Labs. “The work Farmstead is doing has wide implications not only for consumer-facing grocery buying, but for the whole supply chain. The fact that Farmstead is trending towards positive contribution margin already speaks volumes about the efficiency of their model. We’re really excited to be involved.”
Mike Hirshland, general partner at Resolute Ventures, said, “To replace a trip to the grocery store, so many things have to go right, from ordering the right inventory to last-mile delivery. Farmstead has cracked the code on making grocery delivery profitable and rapidly scalable – this could legitimately become a monster company.”
Farmstead CEO and co-founder Pradeep Elankumaran said: “We went into this business knowing that data would be the key to making our model sustainable. Our experience in the Bay Area has shown us that it’s possible to locally source and deliver groceries profitably.
“In the last year, we have turned all the tricky operational parts of our business into digital products that abstract away much of the complexity and drive profitability on each order. With our playbook in hand, we’re already laying the groundwork for aggressive geographic expansion in 2019.”
© FoodBev Media Ltd 2019
World Food Innovation Awards open for entries!
Have a Food product worthy of an innovation award? Then you’re invited to enter the World Food Innovation Awards.
Don’t delay – enter here today!