Organic food delivery startup Good Eggs wants to change the way people eat, making it easier for customers to buy organic foods produced by independent farmers and vendors nearby. With plans to bring its marketplace of locally sourced sustainable foods to more users, it’s raised $21 million in funding led by Index Ventures to expand to other cities.
Good Eggs is kind of like Instacart, but purely for locally sourced organic and sustainable meats, produce, and other goods. It offers up a marketplace to enable customers to buy from nearby farms and vendors, but then handles all the logistics associated with packaging up their orders and handling delivery.
For its customers, Good Eggs offers farmer’s market-quality goods without the hassle of actually going to the farmer’s market. It aggregates goods from a number of different vendors to offer up not just produce from local farms, but also meats, dairy, baked goods, and a wide selection of pre-packaged snacks and drinks. Customers select whichever items they want, and then Good Eggs does the work of collecting all those items from different vendors and then delivering them to the customer’s door free of charge.
For vendors, the platform provides a way for farms to find new customers, creating new demand for their goods. Rather than going through the hassle of packing up a truck and taking it to a farmer’s market, where a vendor never knows what they will sell, Good Eggs tells them exactly what customers want. They drop off their goods at one of the company’s local distribution centers, and then Good Eggs does the work of packaging up orders for its customers and making the delivery.
Generally speaking, that enables customers to get better, fresher goods than they would from their local supermarket, and at better prices than they would see at a farmer’s market. Meanwhile, vendors get better margins from goods sold on Good Eggs than through their other sales channels, which generally include CSAs or local farm-to-table restaurants.
For all those reasons, Good Eggs is seeing adoption on both the consumer and producer sides of the marketplace. According to CEO Rob Spiro, Good Eggs has delivered hundreds of millions of pounds of food for local vendors, and is becoming a meaningful portion of food infrastructure for markets it operates in.
Good Eggs launched in the San Francisco Bay Area just 18 months ago and is now in three other markets, which include Los Angeles, New Orleans, and Brooklyn, N.Y. The company has more than 600 producers in those cities, with more than 200 in San Francisco alone. But the company is looking to expand into several more markets over the coming months, and that’s where the new funding comes in.
For Good Eggs there’s a significant cost to entering into a new market, since the model depends on it providing the logistics and delivery infrastructure for its vendor partners. In each city, it operates local food hubs, where it receives, stores, and packages up its customers’ orders for delivery each day. Altogether, the company has 215 people working for it now, but that will continue to grow as it enters new markets.
In addition to the physical infrastructure that the company has built out, it’s also built a fair number of powerful apps in the background to help manage the logistics related to sourcing food from vendors and delivering it to customers. It’s not just building out a single app to connect buyers and sellers — it’s building out an entire supply chain for locally sourced foods.
That includes a tablet app used by employees in its food hubs to organize the items that they stock and ensure that they are stored at the correct temperature, as well as a mobile app used to power deliveries. It’s also created a platform for its producer partners to manage inventory and to optimize the sales of their goods.
For Index, the appeal of investing in Good Eggs came in part from the “doing well by doing good” side of the company’s business, which seeks to make eating sustainable food, well… sustainable. Index Ventures partner Danny Rimer noted those businesses tend to outperform those which only seek to make a profit.
But Good Eggs also follows a marketplace model that Index is already familiar with. Rimer compared the Good Eggs business to Etsy, which Index invested in back in 2010.
“One of the things we learned from Etsy is that the customer is interested in getting to know the supplier,” Rimer said. “They don’t really want to buy generic goods… They want to know how something is made, and how it was delivered. What [Good Eggs] is doing is taking a farmer’s market and enabling you to shop from it seven days a week.”
With its new funding in place, Good Eggs will be able to do that in more places for more users.
Both Danny Rimer and Rob Spiro will be joining us for TechCrunch Disrupt SF this week, and you should, too! More details here can be found here.