Farmstead is an “AI-powered digital micro-grocer” that wants to reinvent the supermarket model with technology that sources and delivers local food from “farm-to-fridge in 60 minutes.” The company officially launched in the San Francisco Bay Area this month. Founded 12 months ago, Farmstead has completed more than 15,000 deliveries to thousands of Bay Area customers, and has raised $2.8 million in seed funding from Resolute Ventures, Social Capital, Y Combinator, and Joe Montana’s Liquid 2 Ventures.
“Farmstead’s goal is to fundamentally transform the American grocery experience with AI technology,” said CEO and Co-Founder Pradeep Elankumaran. “In 2017, consumers shouldn’t have to drive to the store, stand in a line and buy food of questionable quality which then goes to waste. By sourcing and delivering the best products to customers in just the right amounts in under an hour, we help our customers throw out less food and take fewer trips to the store each week, cutting down on waste and pollution.”
Farmstead’s fulfillment model is designed to reduce the more than 38 million tons of food waste that are generated each year. Using proprietary software, Farmstead customers can select items from a curated selection of local farm produce and grocery products. After one order, Farmstead’s AI calculates and predicts users’ habits to know exactly how much food to order from local sources daily, weekly, seasonally and annually, which will reduce food waste substantially, the company says.
“This is what a truly efficient, eco-friendly grocery experience should look like in an industry with a model that hasn’t changed in 60 years,” said Resolute Ventures partner Mike Hirshland. “Farmstead’s digital micro-grocery model dramatically improves upon the traditional grocery store, and utilizes the gig economy to modernize what has been a low-tech, wasteful sector.”
“Food is such an integral part of life in the Bay Area, along with technology and environmentalism, and Farmstead has blended these things together perfectly,” said Joe Montana, Partner at Liquid 2 Ventures. “We’re excited to have the opportunity to invest in Farmstead and look forward to helping them grow nationwide. We believe they will make a big impact on the sector and the lives of Bay Area families.”
Farmstead stocks micro-warehouses in the Bay Area with “just the right amount” of local, minimally packaged foods and an algorithm directs delivery drivers to use the most efficient, traffic-free, eco-friendly routes, the company says. Farmstead utilizes reusable ice packs and bags, which drivers collect along with milk bottles from prior Farmstead deliveries for reuse.
Farmstead says it matches local supermarket prices and won’t force users to meet a minimum purchase amount after their first order. Customers can choose flexible delivery options including one-hour, same-day and weekly services. Customers who join a weekly, eco-optimized delivery route, receive free delivery. Otherwise delivery is $3.99 or, for one-hour delivery, $4.99.
Any food that isn’t purchased by Farmstead customers is donated to national food bank network Feeding America, which sends it to a shelter for women in the Bay Area.