Far­m­drop raises £10m to open Manch­ester site

The Guardian - - FINANCIAL - Sarah But­ler

The eth­i­cal on­line gro­cer Far­m­drop has raised £10m from in­vestors in­clud­ing the founder of Skype to take its home de­liv­ery ser­vice to the north of Eng­land. The Lon­don-based com­pany, launched in 2014 by a for­mer City bro­ker, Ben Pugh, wants to open a ware­house in Manch­ester after hav­ing ex­panded to Bris­tol and Bath late last year.

Far­m­drop be­gan by de­liv­er­ing pro­duce from lo­cal farm­ers to li­braries, com­mu­nity cen­tres and pubs, but now uses a fleet of elec­tric vans to de­liver di­rectly to homes, Ocado-style.

Pugh says it gives its 300-plus pro­duc­ers a big­ger share of prof­its than the su­per­mar­kets by keep­ing costs low and us­ing apps to make or­der­ing, pro­cess­ing and de­liv­er­ing goods as ef­fi­cient as pos­si­ble. The farm­ers, most of whom are within 150 miles of shop­pers’ homes, keep 70% of the re­tail price, com­pared with just over half at a tra­di­tional re­tailer.

Pugh said sales had dou­bled in the past nine months to about £6m a year and that he ex­pected them to dou­ble again in the next nine months.

The Skype cofounder Nik­las Zennström is suf­fi­ciently con­vinced to be pump­ing more cash into the busi­ness on top of a pre­vi­ous in­vest­ment.

He said: “What we find so com­pelling about Far­m­drop is the way they’re us­ing tech­nol­ogy for good. By cre­at­ing a di­rect route to mar­ket for farm­ers, Far­m­drop is help­ing to create a health­ier and more ef­fi­cient sup­ply chain.”

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