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LOCATION: San Francisco, California

INDUSTRY: Tech-Enabled Business Service; Food & Beverage; Consumer Products

Farmstead is an tech enabled grocery service that has no in-store shopping options for customers. Instead, Farmstead operates “dark stores” – small-format grocery warehouses designed to streamline picking, packing and delivery within a 50-mile radius.  This model allows the Company to eliminate many of the fees and inefficiencies of traditional grocers and competitor grocery delivery services.  Delivery to customers within the radius is free for subscription members and customers with large one-hour delivery orders.  Farmstead’s warehouses, while smaller than traditional grocery formats, still offer a mixture of national brands and local products.

Farmstead’s business model is backed by its proprietary AI-based software that identifies optimal inventory levels, generates efficient order pick-pack and delivery, and significantly reduces food waste compared to traditional grocery. This machine-learning technology enables Farmstead to better understand customer buying trends and helps pair inventory supply with forecasted demand. 

In addition, Farmstead has started selling its Grocery OS software to other grocery businesses that want to move online. In some cases, the grocer may simply buy the software, while in others, Farmstead works with them to operate the warehouse.

Farmstead’s founders have a successful track-record in emerging technologies and the management team has meaningful grocery and grocery-delivery expertise.

Kaulig Capital was introduced to Farmstead and the investment opportunity through our relationship with an advisor and co-investor in other Kaulig Capital portfolio companies.