D.C.-based flower delivery startup UrbanStems has closed a $1.5 million round of seed funding, no pun intended. The funding, led by Middleland Capital, is the first venture funding for the previously bootstrapped startup.
UrbanStems launched its web-based flower order and delivery service in D.C. almost exactly a year ago. UrbanStems offers a quick and easy way to order a variety of curated, seasonal bouquets (price varies from about $35 to $55), sending them by bike messenger to your lucky flower recipient. You get a photo of the flowers to prove their arrival and good condition when they arrive, curing one of the big complaints of the flower delivery industry. It's a simple enough idea, but an impressively popular one.
"People sign up and they don't go back," said Jeff Sheely, who co-founded UrbanStems with his friend Ajay Kori. "We're seeing more and more growth every month."
That growth propelled the startup to expand to New York in December, where it's comparatively low price has made it stand out in the market. The success has also driven a greater variety in the flowers, which are shipped up from fair trade farms in Columbia and Ecuador run mostly by women, and housed in storage units in the area in advance of their delivery.
Disrupting the $8 billion cut flower industry would take more than just a shift in price and delivery confirmation, and UrbanStems has hit on local partnerships as a way to stand out from the crowd even more. Almost every holiday sees a special kind of "bouquet" on offer, including bow ties and chocolate. The two founders explained that that kind of creative touch is a big part of what draws people to UrbanStems, and keep them checking in every so often to see what else is available.
"We offer what no other bouquet delivery service does," Kori said.
Middeland Capital' Alex Pessala will join UrbanStems board as part of the investment. Along with Middleland, the funding round included investment from Sagamore Ventures, NextGen Angels and Great Oaks Venture Capital. Sagamore Ventures is the investment group of Under Armour CEO and University of Maryland alumnus Kevin Plank, whose own Valentine's Day flower delivery service in college formed the seed money for what would become Under Armour.
The new funding will be used to improve and add to the services UrbanStems offers via its website and its new app, which launches on the iTunes app store this week, with an Android version in the works. Sheely and Kori said there will also be some new cities in their expansion plans this year. Right now, UrbanStems is running a Valentine's day promotion, with the chance to find a "golden ticket" in a bouquet offering special prizes from the Alex restaurant at The Graham Hotel, & Pizza, Logan 14 Aveda Salon, Ah Love Oil & Vinegar or Olivia Macaron.
"We make it easy to make the holiday feel special," Sheely said.
