Farmigo, a startup rethinking the local farmers’ market, has raised $16 million in series B funding.
Founder and CEO Benzi Ronen said the company started out by building software for farmers, but its focus has shifted to a consumer marketplace where you can order farm-fresh groceries, then pick them up from local “food communities,” such as a nearby school or office. (Farmigo launched one of its products at our Disrupt conference back in 2011.)
Ronen suggested that this makes for a convenient alternative to a farmers’ market — many consumers don’t live near one of those markets, or don’t have time to shop there every week. He said it also offers more choice and variety than community supported agriculture programs, which follow more of a “one-to-one” model, where the buyer ends up with whatever food the farm has produced that week.
There have been some big successes in the food tech industry, like Instacart and Blue Apron, but Ronen said things have been “slower to materialize” in the farm-to-table sector. In fact, both Good Eggs and GrubMarket recently suspended operations outside of San Francisco so that they can rethink their model.
The challenge, Ronen said, is that farm-to-table companies are “reinventing an entire supply chain — it’s hard, it’s physical, it’s not just bits and bytes.”
Farmigo’s model works, he argued, because of its food community distribution system (so the company isn’t delivering produce to the home of every customer) and because of the technology the team has built to make the process more efficient.
“We’ve basically built an end-to-end ERP system that tracks everything in the supply chain,” Ronen said. “We know exactly what [the farmers’] inventory is, we know exactly what was preordered and packed, this is the software that the driver uses to manage the pickup site. Building that software has been our labor of love for the last six years.”
Farmigo is currently available to consumers in the New York City, New Jersey and Northern California regions, with plans to launch in Seattle-Tacoma on October 14. (Ronen relocated from San Francisco to New York a couple of years ago.) The company says it’s selling to more than 15,000 families and adding about 2,000 new families each month.
The round was led by Formation 8 (an investment firm founded by Joe Lonsdale, Brian Koo and Jim Kim), with participation from existing investors Benchmark and Sherbrooke Capital. Farmigo has now raised a total of $26 million.