Castiron Raises $6M Seed Round to Empower Food Artisans

The Impact of the Pandemic on the Food Service Industry

The recent pandemic has presented significant challenges for all sectors, yet the food service industry has experienced particularly acute difficulties. Over 90,000 restaurants and bars have been forced to cease operations, resulting in widespread unemployment within an industry already characterized by instability.

Those who retained their positions often encountered heightened stress due to the demands of direct customer interaction during a public health crisis.

A Rise in Entrepreneurial Ventures

As the industry landscape has shifted, experienced food service professionals are increasingly establishing their own ventures. These range from local take-out delivery services to nationwide distribution of specialty food items like kombucha.

Mark Josephson, founder and CEO of Castiron, explains that many individuals receive encouragement for their culinary skills – praised for their cakes, sourdough bread, or unique hot sauces – and harbor dreams of turning these talents into a business. However, they often find themselves dedicating the majority of their time to non-culinary tasks.

Introducing Castiron: An E-commerce Solution

Recognizing this challenge, Josephson created Castiron, an e-commerce platform specifically designed for independent chefs. The company recently secured $6 million in seed funding from Bowery Capital, Foundry Group, and High Alpha.

Josephson brings extensive experience to Castiron, having previously served as CEO of outside.in (acquired by AOL) and Bit.ly for seven years. However, Castiron represents his first venture as a founder.

Features and Business Model

Launched in October, Castiron offers “food artisans” customizable e-commerce websites. These sites incorporate features such as:

• Dynamic inventory management
• Order fulfillment tools
• Newsletter and marketing capabilities

Castiron’s revenue model is contingent upon the success of its users. The platform charges a 10% commission only after the food artisan begins generating income, in addition to a standard 2.9% + $0.30 payment processing fee.

Alignment with Customer Success

“When I decided to start this company, it was crucial to me that we were genuinely aligned with our customers’ success, having launched several startups previously,” Josephson stated in an interview with TechCrunch. “I only want to succeed if our customers succeed.”

He emphasized the importance of a low-risk product, acknowledging that his target customers are generally risk-averse.

Current Operations and Future Growth

Currently, Castiron operates exclusively within the United States, navigating the varying regulations surrounding home-based food businesses – often referred to as cottage food laws – across different states.

The increasing unemployment rates since the pandemic’s onset have prompted many states to ease restrictions on independent food businesses. Josephson estimates that approximately 40% of Castiron’s users operate local delivery services, 40% offer products for local pickup, and 20% ship their goods nationwide.

While “several hundred” users have already established their businesses on Castiron, this seed funding will primarily support a strategic hiring initiative to facilitate business expansion.

The Future of Small Food Businesses

“This surge of entrepreneurs building small businesses represents a significant component of our future economy,” Josephson observed. “Having worked in media, digital media, and software marketing, I’ve encountered nothing quite like this.”

He playfully added, “I regularly receive deliveries of chocolate chip cookies, roasted coffee beans, biscotti, sourdough bread, and hot sauce. What’s not to love about that?”