Online grocery platform Farmdrop raises £7M Series A led by Atomico

Farmdrop, a farmer-friendly on-line grocery system based in the U.K., has lifted £7 million in Sequence A funding. Top the round is Atomico, the London VC fund founded by Skype co-founder Niklas Zennström.

Originally introduced in 2014 as a ‘click and collect’ provider that let you order groceries on-line direct from farmer-producers and decide on up your order at a nearby collection position, the firm has because pivoted to door-to-door supply but with the exact standard concept of a market that bypasses the mass supermarkets.

“The essential dilemma is that the supermarket’s dominance about the last fifty several years has place substantial quantities of downward tension on farmgate prices,” explains Farmdrop co-founder Ben Pugh. “In this atmosphere, the only solution for producers has been to concentrate on yields and sturdiness which has led to a massive depreciation in the style and nutritional top quality of homegrown foods”.

To counteract this, the Farmdrop system statements to remove (or substitute) wholesalers and shops from the provide chain, which enables it to fork out producers approximately double what they would get from a grocery store. Specifically, I’m instructed that farmers acquire all around 75 for every cent of the final shelf price. To place this in context, Pugh says that most farmers would be blessed to get fifty for every cent from the supermarkets.

“Basically, Farmdrop is creating a successful route to marketplace for scaled-down farmers whose sole goal is mature foodstuff that maximise flavour and nourishment. For shoppers we offer you them the most very affordable access to the freshest, farmer’s marketplace top quality components,” he says.

In the meantime, I’m instructed that the startup ideas to use the new funding to boost shopper working experience, establish new know-how for farmers to regulate their have stock, and launch new distribution hubs outside the house of London, with an opening in Bristol prepared for later in 2017. It also says it attained annualised revenues of £3 million previously this 12 months.

Atomico’s Zennström responses: “Atomico likes to make investments in firms seeking to tackle some of the bigger sustainability problems our planet is going through. That is why we’re unbelievably happy to have led Farmdrop’s next expense round. They are deploying innovative know-how to simplify the foods chain and fulfill the increasing demand for extra sustainably sourced, nearby food”.

In addition to Atomico, Farmdrop’s other backers include things like Jon Reynolds, the CEO and co-founder of SwiftKey, Alex Chesterman, the founder of Zoopla, Nigel Wray, serial trader and chairman of Saracens Rugby club, and Quentin Griffiths, the co-founder of Asos.