Floral Delivery Startup UrbanStems Lands Funding
After growing 130 percent last year and 500 percent since 2018, Washington, DC-based flower delivery startup UrbanStems said Wednesday, May 5, that it was on the right track thanks to a surge in Mother's Day, its busiest week in its four year history of booking orders, and also that it has just completed a $ 20 million financing round.
Announcing its Series C fundraiser, which will bring UrbanStems' cumulative external investment to $ 48 million, CEO Seth Goldman told PYMNTS that he plans to use the proceeds to invest in people, more products and additional technology. "We are very pleased to raise this capital and to use the significant investments in our technology platform and the expansion of our infrastructure to build our team," he said.
With immediate effect, the direct-to-consumer retailer (D2C) generates around 75 percent of its sales with flowers and the rest with gifts such as candles, vases and various teas and chocolates, which it would like to expand. The company currently ships its goods to all 48 states and offers same-day delivery in Manhattan, Brooklyn, and Washington DC, but is also looking to new markets.
"We are currently evaluating around 10 markets where we could expand our service in the same day and will soon begin prioritizing them," said Goldman, noting that UrbanStem's markets are determined based on sales potential, supply chain complexity and strategic Value values a particular market.
Different and annoying
Like any growing range of delivery-dependent retailers, UrbanStems has to face the “last mile” challenges associated with getting goods to customers' doorsteps on time and undamaged.
However, unlike most retailers who outsource delivery to third party vendors or use contracted or non-privileged gig staff to move their goods, UrbanStems has taken a different in-house approach that the company uses company-wide - from growers to designers to to delivery staff. "Right from the start, we hired all of our last mile couriers as W2 perks," Goldman said, citing the time and effort it takes to attract and retain talent across all areas of the company.
At the same time, the company has grown its own source for flower growers, which has not only allowed them to shut down the middlemen, but has also given them more control over what is planted and picked. "We wanted to build direct relationships with growers that would allow us to buy the absolute best stalks, but also have the greatest control over the supply chain," he said. "Over the past four years we've focused on making our designs more beautiful, unique, and interesting, and these direct relationships have been critical to that endeavor."
Grow the business
Since its launch on Valentine's Day in 2014, UrbanStems has sought to “disrupt an outdated flower delivery system” by providing a superior experience for its customers. Today the company employs more than 100 people and its growth attracts the attention of customers and investors alike.
“Based on our experience with direct-to-consumer brands, we see an enormous number of possibilities in the personalized gift sector. We strongly believe that with its focus on product quality and customer experience, UrbanStems is positioned to accelerate its rapid growth, ”said investor Jason Stiles, CEO of DFE Capital Management. "We are very excited to be working with the UrbanStems team."
Meanwhile, while keeping its eye on new cities on the same day, the company has launched a new TV marketing campaign and branded partnerships with Vogue and online dating site Bumble.
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