Forager, the Portland-based startup that has built an online marketplace to connect grocers and local farms, has raised $625,000 of an $800,000 offering to continue to build out its product and grow its sales team.

The funding comes in the form of convertible debt, which is simply a loan that can be converted to equity in the company at a later date. Investors include Coastal Enterprises Inc. in Brunswick and other angel investors, according to David Stone, founder and executive chairman of the company.

Several online media outlets, including Crunchbase, have misreported the news because of a vague press release, claiming Forager recently raised a $4 million round. In fact, $4 million is the total amount the company has raised since it was founded in 2016, Stone tells Maine Startups Insider. Stone turned over the CEO role to Joe Blunda in 2019.

Forager’s online and mobile platform digitizes and streamlines the local food procurement-to-payment process, making it easier for grocers, co-ops, farmers, producers, and other buyers and sellers of local food. The company also has a proprietary system that finds and vets new suppliers, which is an expensive and unreliable process.

Forager will use the funding to further develop sales channels, build out key product features and upgrades that address both grocer and farmer needs. Blunda told Crunchbase that the company currently has 10 employees and will add two to five more by the end of 2021.

The company is not yet profitable, according to Stone.

“The grocery segment moves very slow and change is hard with entrenched behaviors,” Stone said. “Of course this is my passion and what I live and die for. Creating great products that change behaviors and impact our world and lives in meaningful ways.”

Stone said the company will raise a Series A round in the fall and is working on a big partnership in a “newish” market segment that he expects will kickoff in Boston in August.

“Our goal is to build the largest network of digital vetted local suppliers so that any wholesaler, institution, grocer, restaurant, distributor can source food locally in just a few minutes, as opposed to hours, days, weeks, or not at all. Thereby we can rebuild our local food system and enable growth and scaling,” Stone said.

Maine has been a leader in local food for decades and has the largest farming/agriculture capacity in New England, and roughly equivalent to Pennsylvania, which is 12x the size of Maine in terms of population, according to Stone.

“Food is the largest industry in the world and has a bigger impact on our environment, healthcare and socio economic systems than any other industry. If we want to make a difference on the future of our planet, this is the place,” Stone said. “And this is why I founded Forager.”

Recently, Forager partnered with Massachusetts based Roche Bros. Supermarkets, Inc. and Bashas’ Family of Stores across Arizona. The company now operates in over 12 states with more than 40 grocers and institutions, and 500 local suppliers. Further, Forager has seen four fold growth since 2018, with nearly 200,000 local products sourced through its platform to date.

 

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