Farmdrop, the UK online grocery start-up backed by the Duke of Westminster as well as Zoopla founder Alex Chesterman, has collapsed, leaving customers scrambling to locate turkeys for Christmas.
The group, which had raised more than $40m in capital according to Crunchbase, told customers on Friday that it had ceased trading from Thursday and scrapped orders scheduled from that date.
“We have been working constantly over the last 18 months to secure the support and capital we need to continue in this effort,” the group told customers in an email seen by the Financial Times. “As of yesterday, it has become apparent that we have exhausted all possible options.”
The message came two days after Farmdrop had urged customers to buy “the best turkey you can buy” from it website. Farmdrop did not respond to a request for comment by publication time.
Founded in 2012 by former Morgan Stanley equity specialist Ben Pugh, Farmdrop had sold organic, local and sustainable food in the London area, sourced from more than 450 producers.
Former Amazon executive Eleanor Herrin took over as chief executive in 2019. The company said sales had “skyrocketed” during the coronavirus lockdowns of 2020.
But it had struggled to establish a profitable business model despite growing consumer interest in locally produced and environmentally friendly foods.
Farmdrop reported a £10m pre-tax loss on £11.8m of revenues in the year to June 2020, the most recent accounts available. It said it was aiming to complete a fresh funding round in the third quarter of 2021.
Auditors UHY Hacker Young at that time identified a “material uncertainty” as to whether the company would be able to continue trading.
The group secured £6m in funding last June from investors, including Wheatsheaf, a division of the Duke of Westminster’s Grosvenor Group. It had also been backed by Chesterman and by Atomico, a venture capital fund set up by Skype co-founder Niklas Zennström.
Customers said on social media that they were left without Christmas turkeys by the collapse. Game developer Alex Fleetwood tweeted: “Farmdrop [has] gone bust, and with it our Christmas turkey order. Super disappointed for the team (and our turkey).”
Suppliers said they had been struggling to secure payment. Nicola Simons, founder of jam maker Single Variety Co, posted a video on Instagram on Thursday saying Farmdrop owed them more than £2,000 for invoices dating back to August and was not responding to messages.
“It is a huge amount of money for our small business . . . At the very least, I ask you to be transparent and communicate with us,” Simons said.
