CashStar co-founder starts digital platform for local foods
Courtesy / Forager
Serial entrepreneur David Stone, who counts CashStar among his successful companies, on March 20 started his sixth venture, Forager, which helps farmers, local grocers and buyers track orders all the way through payments online.
CashStar co-founder David Stone’s sixth startup, Forager, aims to bring farmers and local grocers into the digital age by tracking everything from procurement to payment online, adding efficiency to a person-to-person system fraught with scattered slips of paper scribbled with orders and invoices.
Launched Monday morning — to coincide with the vernal equinox signaling the start of spring — the Forager platform has two sides. The free one for farmers lists products available and prices. The other one, for an undisclosed monthly flat fee, is for local grocers, food co-ops and wholesalers to see what products are available from which farmers.
In both cases, the online platform also lets producers and buyers track orders, invoices and payments. Portland’s Freeport Metrics developed the software, and Forager set up and will run the digital platform.
“We started Forager because of all the consumer trends going on,” Stone, who co-founded digital gift card company CashStar in 2007 and left in 2013 to “reboot,” told Mainebiz in an interview before formally launching the company. “There is a change coming [to the food industry] partly driven by urban millennials, who have a relationship with food.”
He said he wondered why only 3% of food on average is bought locally nationwide. Maine is ahead of the curve at more than 6%, he said.
“But that could be 15% in Maine by 2020 or 2021,” Stone said. “Some 90% of consumers look for freshness, and 40% now buy local food weekly.”
The $14 billion locally produced food market is ripe for expansion, he said.
Forager, based in Portland, ran a trial of its platform this past summer among about 50 Maine farmers and a handful of grocers including the Portland Food Co-op, Royal River Natural Foods in Freeport and Rosemont Market & Bakery in Portland.
As of today, Forager is formally releasing the platform throughout New England and New York state.
“We will continue using it,” John Crane, general manager of the Portland Food Co-op, told Mainebiz. “It is well worth the investment.”
He did not know the fee, but said he expects it to be inexpensive. Stone would not reveal the flat fee except to say a local order costs 6% to 10% of the total order cost in labor and errors, and “we’re charging substantially less than that.”
Saving time, money
Crane, who said his co-op’s membership hit 4,000 on March 17, double what it was in November 2014, said that before Forager’s platform, co-op staff spent a lot of time dealing with paper invoices written on scraps of whatever was in the truck, including pieces of cardboard boxes. During ordering, it wasn’t unusual to go back and forth several times by email or on the phone for the six to eight farmers who have the same product.
“This is a great next step in what Forager is doing as agriculture is growing,” he said. “Our infrastructure has not caught up yet with the growth. When they approached me about a year ago about this concept, I thought, ‘this is exactly what I and others needed to bring efficiency.”
He said the Forager system has saved 6% to 8% in labor and time. “That’s significant for us,” he added.
The co-op, which has 28 employees, expects revenue of $3.9 million in calendar 2017, up from $3.75 million last year. About 40% of sales are from local foods and goods, Crane said. Stone added that the average across the United States is 8%.
One unexpected benefit of the Forager system, Craine said, is that when he looked online at the list of items the store’s 250-plus farmers and food processors offer, he discovered some farmers are offering products he didn’t know they had, so he can add those to his orders and compete with nearby stores with different products. Of the 250, about 30 farmers are on the system, 12 of whom are vegetable farmers.
Personal mission
Stone’s companies tend to take on a personal mission. “I started CashStar to try to prove we could build a great technology company in Maine,” said Stone, who moved to Maine from a Massachusetts venture capital firm in 1997. “And 20% of the people we hired in the early days didn’t have jobs.”
With Forager, he was looking for even more of a social impact and relevance to Maine. “I have five kids and thought of the food we put on the table,” he said. “And my wife belonged to CSAs before they were a ‘thing.’”
Stone said the company to date has total investment of about $1 million, including from angel investors and a Maine Technology Institute development loan of $374,455 with a match of $411,473.
“We’ve raised enough money to get us through the beta stage and early commercialization,” Stone said. “We will raise more money in the fall. So far we’ve raised convertible debt and the MTI loan so the new money may be equity. But we must find social impact venture capitalists.”
Stone was a Mainebiz large company 2012 Business Leader of the Year for his work at CashStar.
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