Some startups choose to bootstrap from the beginning, while others are forced to self-fund due to lack of investor interest or business models that don't fit traditional VC. FarmboxRx decided to go into business in-house after founder Ashley Tyrner didn't like the advice he was getting from potential backers.
Tyrner told TechCrunch's Found podcast that when she went out to raise money for FarmboxRx, a direct-to-consumer produce box company aimed at solving food deserts at the time, she was only offered venture investors if she agreed. He said he noticed that he was interested. She pivoted her company towards current hot trends.
“Every venture capital we talked to, and actually everyone who was even remotely kind to us at the time, wanted us to become a meal kit,” Tyner said. “It wasn't something we were focused on. We didn't want to jump on the meal kit bandwagon. Looking back, we're really glad we didn't raise money and we didn't want to jump on the meal kit bandwagon. , we still don't have any funding, and most of the meal kits have been phased out.”
Instead, the company leaned into its existing produce box-focused model and supply chain that built on that strategy and built new revenue streams on top of that.
When it was announced in 2020 that health plans would be able to offer food as medicine, FarmboxRx took advantage. The company began working with health plans to offer the boxes as a prevention mechanism to allow health plan customers to use food as medicine. Tillerner said it was difficult at first to navigate the bureaucracy and compliance required to handle government-sponsored health care such as Medicare and Medicaid, but the company eventually broke through and now serves about 90 plans. He said he is doing so.
“This industry has been a very difficult industry to break into,” Tilner said. “I went looking for plans to work with us, and there were no plans that wanted to work with us. But I found it in Pennsylvania. A lot of my career has been… Thanks to the product director there, she took a chance on us and changed to a different plan. We're actually working with the top five companies that we're working with now. ”
Since partnering with health insurance, the boxes not only provide fresh produce to people with chronic conditions who could benefit from the produce itself, but also include nudges and reminders to encourage users to take action. These friendly reminders ask users to perform tasks like getting a colonoscopy or eye exam to prevent health problems from worsening.
Tiner said the company has seen strong growth through this model, but there are still many medical plans to work on. Although the company has been fielding inbound interest from investors for years, Tilner remained focused on developing the product he wanted. Now, the company is ready to accept outside funding and expand to the next level, Tilner said.
“So we're in a really good position now to be able to bring the right investors into the company that can really help us grow to the next level,” Tinner said. “You know, we're a growth-stage company. Now, even on the healthcare side, we're no longer a startup.”