Farmstead, the next disruptor?

“No one wants to go to the store anymore.”

That’s the thinking behind CEO Pradeep Elankumaran’s Farmstead, a California-based AI-powered digital grocer that is getting ready to accelerate expansion across the United States.

“Think of us as if Whole Foods was rebuilt from scratch by tech founders,” Elankumaran told TechCrunch recently.

Now Elankumaran is setting the stage for that accelerated geographic expansion by announcing a new round of funding. The company says it has raised an additional $2.2 million in a venture round from ARTIS Labs, Resolute Ventures, Y Combinator, Red Dog Capital and other investors, bringing the total raised by the company to date to $7.5 million.

“To replace a trip to the grocery store, so many things have to go right, from ordering the right inventory to last-mile delivery,” said Mike Hirshland, general partner at Resolute Ventures, in a press release. “Farmstead has cracked the code on making grocery delivery profitable and rapidly scalable - this could legitimately become a monster company.”

Farmstead has been operating in the San Francisco Bay Area since 2016 on a base of AI-powered predictive analytics models that it says help it accurately predict demand and supply, deliver orders of fresher-than-the-usual local products in less than an hour, and minimize food waste. The company says its customer base has been growing swiftly, 20 percent to 30 percent month-over-month.

“We went into this business knowing that data would be the key to making our model sustainable,” Elankumaran said in a press release. “Our experience in the Bay Area has shown us that it’s possible to locally source and deliver groceries profitably. In the last year we have turned all the tricky operational parts of our business into digital products that abstract away much of the complexity and drive profitability on each order. With our playbook in hand, we’re already laying the groundwork for aggressive geographic expansion in 2019.”