Milkrun Secures Funding for Farm-Fresh Grocery Delivery

Julia Niiro and the MilkRun Revolution in Food Supply

Julia Niiro is dedicated to establishing a food distribution network that directly links small agricultural producers with consumers.

The Genesis of MilkRun

Niiro launched MilkRun, a subscription-based service providing weekly essential groceries sourced from small, regional farms, in 2018. This followed her own experience becoming a small-scale farmer in Portland, Oregon.

Having acquired a meat-processing facility, she collaborated with local ranchers and discovered that 34% of farmers are aged 65 or older. These farmers face increasing demands for food production alongside a growing population, yet receive only approximately 10 cents in profit for every dollar of revenue.

Addressing Farmer Profitability

“Our core strategy centers on boosting profits by facilitating increased purchases of goods from smaller farms,” Niiro explained to TechCrunch. “Mirroring the traditional milk delivery model, customers purchase directly from the farm and receive home delivery. The future of the food sector will focus on minimizing intermediaries.”

Significant Growth and Funding

The company experienced a 15-fold increase in growth during 2020. To sustain this expansion, MilkRun secured $6 million in Series A funding.

Spark Capital spearheaded the investment, with participation from existing investors including Revolution’s Rise of the Rest Seed Fund, Social Impact Capital, and Congruent VC. This latest funding brings the company’s total raised capital to $10 million, encompassing funds obtained after attending Techstars and Y Combinator in 2020, as Niiro stated.

Expansion and New Product Development

This new capital will allow MilkRun to broaden its delivery services to include Seattle and Austin, with a fourth, currently undisclosed, market planned for early next year.

The company is also introducing new products. A new bacon offering has recently been added to the subscription service, and collaborations with butchers are underway to provide a variety of styles and cuts. Furthermore, MilkRun is partnering with seafood suppliers in the Pacific Northwest to incorporate seafood into its offerings in other markets.

Connecting Farmers and Consumers

MilkRun collaborates with over 300 small and medium-sized farms. Customers can select desired products online, such as eggs, meat, produce, and bread.

The service operates on a recurring subscription basis, with no minimum order requirements or subscription fees, and provides free, contactless delivery. Niiro confirmed that farmers receive 50% of every dollar spent.

Building Relationships with Farmers

Since the service’s launch in 2019, Niiro has valued the opportunity to learn alongside the farmers. Recognizing the high opportunity cost for farmers as they increase their purchasing power, she emphasizes that building relationships has been crucial from the beginning.

This involves efficiently integrating farmers into the subscription service and establishing the necessary infrastructure, she added.

A Shift Towards Sustainable Food Systems

“There has long been a demand for locally sourced food, but the existing supply chain has been disrupted for an extended period,” Niiro observed. “Now is the time to rebalance the scales towards sustainability, prioritizing small and medium-sized farms. As commodity prices rise to meet growing food needs, we are accelerating awareness of the potential to rebuild these systems and foster direct commerce.”

Spark Capital’s Investment

Niiro expressed her enthusiasm about welcoming Spark Capital as the lead investor, describing the venture capital firm as “a strong supporter of ambitious visions and concepts.”

She explained that the food industry is a complex and extensive system, and that MilkRun represents a long-term endeavor as it integrates into the supply chain and prepares for its next phase: becoming “the largest farmer’s market in the nation.”

The Appeal of a Curated Grocery Experience

Kevin Thau, general partner at Spark Capital, stated that this mission was a key factor in the firm’s investment. While Spark typically focuses on consumer-driven businesses, Thau initially hesitated regarding grocery ordering, even as online food purchases increased during the global pandemic.

As a discerning customer who prefers to personally select his own fruits and vegetables, his unsatisfactory experiences with food delivery services led him to favor farmer’s markets, often traveling to rural areas for high-quality produce.

Simplifying Grocery Shopping

Thau pointed out that most consumers consistently purchase the same grocery staples each week. Therefore, rather than navigating thousands of SKUs, MilkRun aims to provide a streamlined online experience.

“MilkRun is capitalizing on the trend of simplification, allowing people to choose less, but with highly curated options,” he added. “Julia possesses a compelling story, vision, and passion. Her unique approach to starting a technology company, centered on supporting local farmers, and her vision for the future align with our values. Consumers are increasingly seeking local businesses and farm-fresh products as they become more aware of sustainability and climate change.”