Hatchery seeks strategic partner as part of $2m fund raising round
The brainchild of Florida-based Max Friedman – who ran a branding and product development agency before launching his foodie marketplace in 2013 – Hatchery gives small brands exposure without making them jump through the costly hoops they often face from bricks & mortar retailers.
One of several online marketplaces to spring up in the past couple of years, Hatchery reflects the fact that consumers are increasingly enthusiastic about discovering ‘small-batch’ foods from artisanal producers, while growing numbers of small producers are looking for other avenues beyond traditional retailers to get their wares to market, Friedman Told FoodNavigator-USA.
“We launched with money from friends and family, but now we’re raising $2m in a seed round so we can better support our platform and scale our offer.
“We’ve already got a few committed partners but we’re looking for a strategic investor or two to come in and offer guidance and support as well as money. So it could be experience in the food community, having a focus on logistics and fulfilment on a national level, having experience with e-commerce platform such as ours – anything that will help us better support our makers.
“We have a very engaged online community and there are some very exciting things we are rolling out in the next few months. We're launching a new program this year that will require some new team members and we also want to bring on more makers [vendors] in a more efficient way."
Thrive, Hatchery, Artizone… the changing face of online retail?
Asked about the growth of online platform Thrive Market, which charges an annual membership fee but claims to offer Whole Foods products at wholesale prices – and like Hatchery – holds inventory centrally at its own warehouses, he said:
“I think what they are doing is really interesting. But they are focusing on larger brands [from established firms/brands such as Hain Celestial, Clif Bar] whereas we are focusing more on small batch independent brands that are not widely available anywhere else. But we’re not talking about ultra expensive products – the average price is around $10.”
Asked about the recent demise of online delivery platform Artizone, which focused more on perishable items, and had a different fulfilment model, he said:
“I thought what they were doing was really intelligent and I think there is demand for this kind of service, but they clearly needed more time [to raise money] and they probably underestimated the amount of energy and resources they needed to make it work.”
Hatchery – which launched in 2013 - has built a community of almost 200 small vendors and shipped tens of thousands of products to an engaged community of food lovers, who keep coming back in part because they have found products they love – and can’t buy anywhere else – and in part because they know they will discover new things, says founder Max Friedman.
“What people really like about the service is that they get everything in one box at the same time, as we hold all the inventory at central locations in Connecticut and secondary hubs in Kentucky and Nevada. So we’re about 1-3 days from every one of our customers.
“This means they don’t have to pay shipping for delivery on four different items, and then wait for two weeks for half of them before certain items are drop-shipped by a vendor. We are a one stop shop.”
Hatchery offers free delivery on purchases over $45 (otherwise, the delivery fee is $4.95, whether you order one item or multiple items).
The heaviest buyers proving to be women aged 25-40, who are active on social media and like sharing food discoveries on Instagram.
