This start-up is taking the mystery out of mystery meat by letting beef lovers crowdsource a live cow directly from ranchers.
"Our customers purchase into a live animal, see the pastures it grazed and the family who raised it, and even know the pedigree of their steak," said Hannah Raudsepp, founder of Honest Beef Company.
Raudsepp, a Nebraska native who grew up on an Angus cattle ranch eating beef every day, told CNBC, "misperceptions about beef production are rampant, in order to fully understand and trust our food, we need to be closer to its source. "
So in February 2016 she launched Honest Beef Company, an online platform where consumers can purchase a share of a live animal directly from American ranchers and have premium beef delivered to their doorstep nationwide.
"Crowdsourcing beef is one way to offer the transparency consumers deserve, and to give beef producers an equal snapshot into where their beef goes and who it nourishes," said Raudsepp.
The start-up's website offers a variety of pre-selected beef cuts that can be bought in shares, from New York Strip shares, to single-animal burger shares, and even bone marrow shares. Selections range from $75 to $160 depending on the cut.
When a steer or heifer is fully funded, or "tips," Honest Beef Company purchases it directly from a humane rancher and coordinates the butchering and aging of the animal.
According to Raudsepp, the company's prices are 25% lower than the leading online beef retailers. "Honest Beef has eliminated over 60% of the conventional beef supply chain, meaning we can offer a top quality product with granular transparency, for a lower price. Additionally, because we have cut out the middle men, we are able to offer our ranchers more for their efforts."
Since its launch the start-up has sold 1,500 lbs of beef, and is in the process of crowdsourcing its third animal.
Getting grilled
In a crowded space dominated by established companies like Omaha Steaks, venture capitalist Nir Liberboim questioned the start-up's ability to scale.
Raudsepp said she's confident that Honest Beef Co. can expand to other regions and that the current focus is on 'nailing and scaling'. "We'll continue to perfect our process, nail our model in our current region, Nebraska, and scale to the next to reach a whole new group of ranchers."
David Wu, a Partner at venture capital firm Maveron, wondered if consumers would really value the start-up's transparency about its supply chain.
But Raudsepp insisted American consumers are becoming more informed about where their food is coming from. "The consumer that cares about what we're doing is really somebody who wants transparency, wants to know what they're feeding their families and who it came from, and also has a little bit of care for the families, the 1% that's raising {the animal] and offering them a more equitable piece of the pie."
To date, the Boston-based start-up has been entirely self-funded, and will soon enter its seed round of funding.
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