FarmDrop backed by ASOS and Street Car founders.
FarmDrop, a new way to buy and sell local and seasonal food is raising capital on equity crowdfunding platform Crowdcube. The digital farmer’s market has launched a campaign to raise £400,000 representing 17% equity in the company. The funding round has quickly raised over £170,000 backed by 26 investors. There has been a single investor contributing £70,000 for the crowdfunding raise. The “click & collect” farmers’ market will use the new capital to expand their network across the United Kingdom
The FarmDrop website allows buyers and sellers of local food to find each other and trade directly via local hubs (or “FarmDrops”) that are run by community members, known as “Keepers”. For every bag of local food sold through FarmDrop, Producers receive 80% of the value, whilst Keepers and FarmDrop receive 10% each.
The FarmDrop platform increases the profitability of producers who reduce their cost of sales from the 50% typically charged by traditional retailers & wholesalers to just 20% of retail price, and also enables savings to be passed on to customers for a fresher product with known provenance. The digital marketplace seeks to combines low customer acquisition cost and high customer lifetime value via an asset light and positive working capital business model.
Launched in April 2013, FarmDrop has been successfully trading at 5 active FarmDrops in London and the South East and more than 300 independent food producers and 400 keepers have signed up to supply and operate FarmDrop’s in their area. The funds will be used to evolve the tech platform and grow the network of FarmDrops to reach 400 FarmDrops across the UK by June 2017, harnessing the increasing demand for tastier, healthier local food at lower prices.
“If you sat down to design the food supply chain on a blank piece of paper today, it wouldn’t look anything like what we’ve currently got”, Ben Pugh, Founder, FarmDrop. “Our model provides significant value for all those involved and presents a fantastic opportunity to reshape the relationships currently dominated by the major supermarkets. By launching this CrowdCube.com campaign we hope to secure the funds to enable us to rapidly grow our business, whilst bringing in real equity investment from a broad range of stakeholders who can share the journey with us.”
Quentin Griffiths, the online marketplace entrepreneur behind ACHICA & ASOS, invested in FarmDrop in 2013 and will do so again as part of the CrowdCube fundraise launching today;
“Acquiring just 0.6% of the UK grocery market would mean annual website revenues of around £1 billion for FarmDrop. And because they can offer both consumers and producers a better deal I’d expect them to get there and beyond over time. It’s a huge opportunity with a great team of passionate people behind it”.
“I invested in FarmDrop because I love the concept and also think the team is outstanding. I firmly believe that FarmDrop is set to become the next big thing in UK food retail – providing both producers and end consumers with benefits that haven’t existed in the market to date”.
FarmDrop was featured in the 2013 Smarta 100 Winner’s list and has also won an innovation award from the Soil Association.
Have a crowdfunding offering you'd like to share? Submit an offering for consideration using our Submit a Tip form and we may share it on our site!