Farmdrop raised another £10m recently. They appeared on Crowdcube at the start of their journey and raised £750k. Now the valuation is five times higher. What's not to like?
Well for one thing they dont seem to be able to make up their mind what they are. Since the Crowdcube round, where they were hub based and pick up orientated, they now deliver. Using electric vans for the last few yards. A completely different business really - more of a dig it up and move it than a pivot. It has certainly delayed their progress.
In the Crowdcube pitch they stated that in 2017 they would have revenues of £70m. So as we all know, these are projections and cant be taken as fact. But you would hope they would be on the same planet as the real figures - wouldnt you? Otherwise, what is the point?
In their latest PR - https://techcrunch.com/2018/06/14/farmdrop-picks-up-10m-series-b/ - they state that they are on target for £10m annualised revenue for 2018. This is a claim made with some considerable pride - one we should be applauding. Well guys when you compare that with your sales pitch for selling £750k of equity in your business, it looks well past its sell by date.
Best we can say is; long way to go. I personally never believed that the UK shopper gives enough of a to take part in the Farmdrop revolution and if they did they would be already be out there supporting farmers markets. People's main anxiety these days is having it now, with as little effort as possible and as cheaply as possible. A very small percentage of us care enough to bother with this. The delivery is incredibly expensive to manage - much like the Deliveroo model - and profits will be elusive. It really doesnt have a USP and barriers to entry for existing food suppliers/delivery co's are low - if the model was ever going to be a success.
Then of course you have to consider the dark clouds of Brexit - which were not even on the horizon when 351 piled money into this via Crowdcube. Small farmers - the core of Farmdrop's supply chain - will be hardest hit and will likely go to wall in numbers in the first 5 years of the chaos we have brought down on ourselves.
Might well be wrong but the numbers suggest not for now.