Farmdrop raises £10m to open Manchester site
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.”