Farmigo, which raised $16 million, is bringing the farmers market to the digital age – providing fresher produce to customers and more income to local farmers
It seems like one of the most popular ventures worldwide, and in Israel as well, is the farmer’s market, where customers are able to purchase fresh produce directly from the farmer. Farmigo recreates the experience and allows buyers to purchase produce online from local growers. The startup has now completed a $16 million Series B funding round.
Severing the supply chain
Founded in 2009 by Israeli entrepreneurs Benzi Ronen and Yossi Pik, Farmigo has an Israeli R&D center and offices in Brooklyn, New York. Farmigo allows consumers to purchase vegetables, fish and even meat directly from the farms that are closest to their house, allowing them to receive fresh and healthy food at a lower cost while still supporting local farmers.
Since the delivery is directly from the producer, there are no middlemen costs to raise prices, and customers can be confident that they are receiving the freshest produce. According to Ronen, every dollar paid by customers translates to 60 cents paid to the farmers, as opposed to 28 cents that they receive through traditional methods – methods that include wholesalers and retailers who collect a portion of the profit.
In comparison to 2014, the company’s business has grown by a factor of 5, and is expected to triple itself in the next half a year. The company operates in over 350 neighborhoods in New York, New Jersey, and several areas in northern California. So far, they have signed a collaboration deal with over 150 different growers, with 20 new providers joining the service each month. The current fundraising round was led by Formation 8, in conjunction with the company’s current investors, Sherbrooke Capital and Benchmark Capital. Since launching, the company has raised a total of $26 million in three funding rounds.
In response to the successful fundraising round, CEO Benzi Ronen said, “With the help of technology, we are able to reconnect people to their food, their community, and their local food producers. The food that we provide is of the highest quality, since we erase the long supply chain created by supermarket chains, and deliver food directly from the field. This allows us to support small, independent farms and food producers and give them a larger profit margin. Our goal is to replace the outdated model of the supermarket chains. We are building a better ecosystem for better food for all of us – our families, our communities, our farmers, and our environment.”
As for the Israeli context, Ronen told Geektime, “We see Israel as a technological center. The world has turned into one of applications that are driven by technology. I have felt for a long time that farming is one of the strongest aspects of Israel’s innovation. We’ve seen a lot of disruption in this field recently, like changes in watering technology for example, and we really want to promote this area in Israel. We will continue to raise funds, mostly in the United States, for marketing purposes, but the development will remain in Israel.”