Online grocer, Farmdrop, which offered a range of ethically produced foods, has gone into administration and told customers who paid for food orders that they need to seek refunds from banks.

FarmDrop

Reports said that many hundreds of customers had been left in the lurch pre-Christmas and would not receive their turkeys, geese, and other festive food orders. With all deliveries stopped, customers were told they would have to contact their bank or credit card companies to try and obtain refunds.  Meanwhile, Framdrop had some 450 producers and some of these have claimed on social media that they were owed money. Some have said that Farmdrop has unpaid-for stock in a London warehouse, with the producers now seeking its return.

The business, which was based in London, was set up by Ben Pugh in 2012. He was a former financial analyst with Morgan Stanley and had been tipped as a ‘name to note in London’s start-up scene’ by the Evening Standard in 2014.

What did Farmdrop offer?

Farmdrop offered responsibly sourced and grown foods from independent producers via its website and sold hundreds of items. The company started out by delivering products from local farms to libraries and other community hubs and then upgraded to a fleet of electric vans in order to deliver to customers’ homes.

It is understood to have had some 10,000 at the start of 2020 and is said to have grown during the pandemic as more sought to use online delivery. Despite this, the company had warned earlier in the year that “growth in orders and sales has not translated into profitability”.

What were Farmdrop’s losses?

The latest accounts filed in July showed the company had pre-tax losses of £10 million compared with £11 million the previous year. Meanwhile, Farmdrop’s auditor referred to financial challenges facing the company and that “These conditions indicate the existence of a material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern.”

In 2018, Framdrop raised £10 million from investors including Skype founder Niklass Zennström, with this used for taking the home delivery service to the north of England. Other shareholders include Wheatsheaf Group, part of the Duke of Westminster’s Grosvenor Estate, and Impact Ventures UK. Alex Chesterman, the founder of property website Zoopla, is another investor.

In the last communication with customers,  Farmdrop said it had been working to secure the support and capital it needed to continue, but “it has become apparent that we have exhausted all possible options. We will no longer be able to serve our cherished customers.”