Company delivers local food from farm to fridge

Farmstead, a Silicon Valley consumer technology company that builds smart digital products to modernize the grocery supply chain, has launched an artificial intelligence (AI)-powered digital micro-grocer that sources and delivers local food from farm to fridge in 60 minutes in the San Francisco Bay area.

Founded about a year ago, Farmstead said it has completed over 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 football legend Joe Montana's Liquid 2 Ventures.

“Farmstead's goal is to fundamentally transform the American grocery experience with AI technology,” said Farmstead CEO and Co-founder Pradeep Elankumaran, in a press release. “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 said its fulfillment model is specifically designed to reduce waste in the grocery industry. Using proprietary software, Farmstead said its customers can quickly select items from a carefully curated array of local farm produce and grocery products. After just 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, reducing food waste substantially.

"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 in a press release. "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."

Farmstead said it does not pack and deliver groceries from large warehouses in remote locations, charge fees to send a third party to the supermarket, or charge for delivery changes. Rather, Farmstead's grocery fulfillment model cuts out the supermarket altogether.

"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 Montana, a partner at Liquid 2 Ventures, in a statement. "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."

By stocking a constellation of micro-warehouses in the Bay Area with just the right amount of local, minimally packaged foods, Farmstead said its delivery drivers are algorithmically routed to use the most efficient, traffic-free, eco-friendly routes, which results in less congestion. Farmstead has chosen minimal packaging and reusable ice packs and bags, which drivers collect along with milk bottles from prior Farmstead deliveries for reuse.

Farmstead said it matches local supermarket prices and won't force users to meet a minimum amount after their first order. Customers can choose flexible delivery options including one-hour, same day and weekly services. If a customer joins a weekly eco-optimized delivery route, their order is delivered for free. Otherwise delivery is just $3.99 and one-hour delivery is $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.