Farmstr, a Seattle startup that helped small organic farmers sell products directly to consumers, is closing its doors at the end of February.
“Despite our early traction, we were up against full-service farmer-to-consumer competitors who attracted deep-pocket investments from top venture funds in Silicon Valley,” said founder and CEO Janelle Maiocco. “Our early momentum and runway was not sufficient to compete with companies that had secured tens of millions of dollars.”
Farmstr raised $1.35 million in funding from Trilogy Partners, Founders Co-op and angel investors such as Rudy Gadre. But the seed financing was not enough to keep Farmstr alive, with Maiocco citing competition from the likes of GoodEggs, Instacart and Amazon Fresh. GoodEggs, which like Farmstr is trying to make it easier for people to buy high-quality products from local farmers, raised $21 million in funding from Index Ventures and others last September.
“Much to my chagrin, we simply didn’t have enough traction to justify valuations for a substantive round of follow-on financing,” said Maiocco, who worked as a trained chef in Europe and grew up on a family farm in Bellingham.
The 8-person company worked with 140 farmers throughout the Pacific Northwest, with about 2,000 customers. It is currently looking to sell its assets.
“As difficult [as this transition] is for myself and my team, we are proud of what we built, our growth in 2014, and the relationships and learnings we gained,” said Maiocco, adding that she plans to continue focusing on the local food movement. “I will be the first to thank my investors and the Seattle start-up community for their support to help bring Farmstr to market. Even in this less than ideal transition, our investors have been supportive – from tough decisions, to a proper wind-down of the business, and an orderly transition for Farmstr employees.”