Learn How This NYC Startup Got Funded by Providing This Service to Neighborhoods
October 19, 2015 - storage organizer
We live in a many opposite universe than a grandparents in scarcely any respect; transportation, communication and many importantly in terms of food. The primitive farm, once holding a biggest role, is now thrown behind all else, where no one thinks twice about where there food comes from. But one association is perplexing to assistance bond us with a food again! Farmigo, a association that is providing uninformed plantation dishes to internal neighborhoods is doing us all a use by ancillary a internal farmers we are all so gladdened to.
On a heels of their recent funding, CEO Benzi Ronen joins AlleyWatch to explain Farmigo from a roots adult and how they devise on expanding further.
Who were your investors and how many did we raise?
Farmigo lifted $16 million in Series B funding. The financing was led by new financier Formation 8 Partners and includes appearance from existent investors Benchmark and Sherbrooke Capital. Farmigo has lifted a sum of $26 million in funding.
Tell us about your product or service.
We’re an online farmers’ marketplace that brings impossibly uninformed food from a best internal providers to available pick-up sites where people already assemble such as a school, a tiny business, a workplace or a personal home.
What desirous we to start a company?
The stream food attention standing quo is what compelled me to start Farmigo in 2009. we felt that a solutions to reinvent a food complement were descending brief and we was endangered about farmers losing their executive purpose in a food production. we saw Big Supermarket apropos a pivotal protagonist of a food ecosystem that uses many middlemen and pushes a farmers to furnish some-more during a cheaper price, in a approach that is unsustainable prolonged term. We also no longer know where a food is entrance from and how it’s being produced. Sourcing is impossibly ambiguous as Big Supermarket works with a prolonged and cloudy sourcing and placement chain, where mass-produced food travels an normal of 10 days before it gets to a plate.
After spending dual decades in a record sector, we saw a event to use record to put farmers behind during a core of a ecosystem and assistance people reconnect with a approach their food is produced. We contingency commission and champion a internal farmers, producers and artisans who are a fortitude of a improved food ecosystem. This is usually by advocating for a varied, independent, anniversary and internal food ecosystem, that we will find a approach behind to food a approach it is meant to be done and meant to taste. FARMIGO, is literally a contraction of FARM and AMIGO, ‘farmers friend’, given we trust that meaningful about a internal farmers and ancillary them is how we can have a durability impact on changing a food we devour and how we devour it.
Farmigo gives full clarity by creation a approach tie between consumers and farms. We use a record height to source food from a best farms and tumble a food placement sequence to emanate a pure food ecosystem that is improved for a consumer, improved for a rancher and improved for a planet. We discharge a guesswork for consumers so that they can trust again where their food is entrance from.
How is it different?
We’re joining people directly to good internal food, regulating a record height that allows us to tumble a prolonged placement sequence of supermarkets, and collect or make food usually after it’s ordered, that ensures a best and freshest food. This just-in-time indication eliminates storage and reduces rubbish and spoilage. This enables us to compensate a farmers and food producers 60 cents to a dollar compared to attention standards, that can be as low as 20 cents to a dollar.
We also have a singular community-based placement model. We’ve transposed a last-mile infrastructure of food smoothness by formulating a drop-off complement of adult to 20 orders in area sites where communities already convene, such as a school, a workplace or a neighbor’s home. This drastically cuts smoothness costs.
What marketplace are we targeting and how large is it?
We’re targeting a food attention that has been valued during about $600 billion. Today reduction than 1% of food and libation sales start online. This is a difficulty developed for disruption.
What’s your business model?
We are changing a food ecosystem by regulating a really fit technology-led just-in-time indication to tumble a food placement chain, joining consumers directly to a growers and producers of their food. We usually collect or furnish what a users order.
Our business indication is privately designed to equivocate a large costs compared with home delivery. The attention is realizing that home smoothness is quite dear and many harder than people expected. Our business indication of carrying an organizer in a area offer as a village pick-up plcae is an unusual advantage in a category. Our indication allows us to equivocate a outrageous costs compared with home smoothness and can scale opposite regions in a approach that is affordable for a consumer and careful from a business perspective. It also embeds us resolutely into internal communities.
What was a appropriation routine like?
We’ve been propitious to bond with good partners such as Benchmark, Sherbrooke and Formation 8 Partners. Our latest investor, Formation 8 Partners, has low imagination in a food difficulty and immediately accepted a hurdles though also a endless opportunities during palm for Farmigo. Our existent investors who have been with us given a Series A round, Benchmark and Sherbrooke Capital, also participated in a Series B round. They have endless believe of a association and their appearance was an additional covenant to their faith that we are on a right path.
What are a biggest hurdles that we faced while lifting capital?
The biggest plea for us and for a online food attention is to be means to denote a scalability of a business. Today, we are benefaction in 4 markets – New York, New Jersey, San Francisco/Bay Area and many recently Seattle/Tacoma. Each of a expansions into new markets has been delicately planned. Our latest launch in Seattle/Tacoma has shown a investors that a business indication formed on community-driven distribution, where we broach food to executive pick-up sites, allows us to scale in a tolerable way.
What factors about your business led your investors to write a check?
The majority of a food difficulty was a pivotal factor. We still buy food a approach we did 100 years ago. This is a difficulty that is prepared to be reinvented.
Another pivotal cause was of march a viability of a business, a stream expansion rate and a singular business indication that uses a really fit record height to reconnect people to their food and to their communities. The fact that we don’t have a dear door-to-door indication is really appealing to a investors, as it gives us a loyal rival advantage.
What are a milestones we devise to grasp in a subsequent 6 months?
We devise on substantiating clever roots in a Seattle/Tacoma segment and on stability to see expansion in all of a 4 markets. Our business has some-more than doubled in early 2015. To date, sales are 5 times aloft than final year and are approaching to triple again in a subsequent 6 months. Farmigo is now feeding some-more than 15,000 families any month in some-more than 350 neighborhoods and operative with some-more than 150 producers.
What recommendation can we offer companies in New York that do not have a uninformed injection of collateral in a bank?
My recommendation would be: concentration on solidifying your business model. Don’t be fearful of creation large changes if we comprehend it’s not operative out. Nothing should be dedicated during this theatre of a company, other than your firmness and joining to delivering a best product to your aim audience. Once we can infer your business indication is ironclad, a right investors will come.
Where do we see a association going now over a nearby term?
I design that a association will continue to grow and launch into a new marketplace in a nearby term. To date, we’re a online farmers’ marketplace with a largest footprint in a U.S. In a prolonged term, we’re aiming to turn a inhabitant company.
Where is your favorite place to suffer a tumble continue in a area?
Our new bureau is situated right between a Gowanus and Carroll Gardens neighborhoods in Brooklyn – it’s a good plcae to suffer all that New York has to offer in a Fall. The neighborhood’s boasts some of a best restaurants in Brooklyn and a revitalized Gowanus waterway is impossibly pacific this time of a year.