Online Grocer Farmstead Raises $ 7.9M to Accelerate National Expansion, Shift the Grocery E-Commerce Paradigm

SAN FRANCISCO — Farmstead, the first online grocer to offer fresh, high-quality groceries, delivered for free, at better prices than local supermarkets, announced today that it has raised a $7.9M Series A round of funding to accelerate its national expansion and recruiting. This brings Farmstead’s total funding to date to $14.5M.

Farmstead’s business has grown swiftly in 2020, driven partially by shoppers’ preference for delivery over going to the store during the pandemic. Now, with stay-at-home orders lifting, Farmstead has found that the vast majority of customers are continuing to use delivery. 75 percent of Farmstead customers are on its free weekly recurring program, ensuring that they have a regular delivery slot each week, plus access to discounts on staples.

In October, Farmstead announced that it will be opening its first expansion market: Charlotte, NC. On Nov. 17, Farmstead announced its second expansion market: Raleigh-Durham, NC. Additionally, in September, Farmstead launched Grocery OS, to help traditional grocers take delivery in-house, and go head-to-head against Amazon’s national expansion. A Top 3 U.S. grocer has already implemented Grocery OS, and Farmstead is in talks with many others, including several of the nation’s Top 10 grocers.

Farmstead is known for leveraging proprietary AI technology and a dark store model – delivery-centric warehouses that serve a 50-mile radius, delivering many thousands of orders per day – to maximize efficiency and reduce costs. As a result, Farmstead offers consumers prices comparable to or lower than most supermarkets, but with free delivery to doorstep. The company is growing quickly, with plans to expand nationwide to a primarily mid-market audience.

Farmstead’s dark grocery store strategy greatly eases entry into new geographies, reduces food waste by 3-4x and helps eliminate food deserts by making fast, inexpensive delivery available to a wider area. Most of all, Farmstead meets customers’ desire for perfect orders with no stockouts, delivered free, with no markups.

“In order to fix grocery delivery and make it profitable, Farmstead took the bold approach of breaking the traditional model and starting completely from scratch, while opening up Grocery OS to other retailers,” said Tim Reynders of Aidenlair Capital. “There is an inevitable path to growing an impactful and powerful company, and we see that potential with Farmstead – we’re excited to work with Pradeep, Kevin and team to grow the company nationwide.”

“The Farmstead team worked hard in 2020 to perfect the dark store model and the underlying proprietary technology that makes Farmstead so incredibly efficient,” said Pradeep Elankumaran, Co-founder and CEO of Farmstead. “We are laser focused on expanding Farmstead’s national brand, and adding more partnerships with grocery chains, helping them increase their daily delivery capacity while driving long sought-after profitability with each order. This industry has been stagnant for long enough – customers demand change and we are building the foundation for sustained e-commerce growth in grocery while exceeding their expectations.”

About Farmstead
Farmstead is the first online grocer to offer fresh, high-quality groceries, delivered for free, at better prices than local supermarkets. Using AI technology, Farmstead has reinvented the grocery buying experience and rewired how food moves across the country, to significantly reduce food waste and fulfill its mission of making high quality, locally sourced food accessible to everyone. Visit or follow @farmsteadapp.