Flower and gift delivery startup UrbanStems has raised $20 million in fresh funding, the company said in an announcement Wednesday.
The funding comes from Leesburg-based SWaN & Legend Venture Partners and DFE Capital Management of Scottsdale, Arizona, as well as Alexandria's Motley Fool Ventures, Crate and Barrel founder Gordon Segal, New York-based Gaingels, Private Access Network (PAN) and others. The new round brings the company’s total lifetime funding to $48 million.
The funding comes as the company prepares for Mother’s Day — and what it sees as its biggest revenue week in company history. The startup saw 130% growth in 2020, as the pandemic pushed more online deliveries of many goods and services, though it did not provide specific revenue. The company said it has grown 500% since its 2018 funding round. The startup will reach $100 million in revenue this year, according to a source familiar with the startup's operation.
The company will use the funding to boost hiring, from around 50 to 55 corporate employees to about 65 to 70 by the end of 2021 — and the same amount of growth for its similarly-sized hourly workforce too, CEO Seth Goldman said in an interview.
But the company also plans to dive deeper into personalizing its flowers and gift deliveries, such as giving people a choice of thousands of different styles of gift cards to include and even allowing them to use a photo of their own or a company logo to give it that personal feel, he said. He said the goal will be to create new ways to make the experience of receiving a gift more personal.
That also includes streamlining the ordering process, especially on mobile, as well as expanding the number of markets in which it does same-day delivery. While the company does next-day delivery across the continental United States, it only offers same-day service in D.C. and New York — although it intends to change that, Goldman said.
“We absolutely anticipate expanding our same-day footprint,” Goldman said. “We know within our same day markets we have opportunities to do things that you can't ship.” And where might those markets be? “If it’s big enough to support an NFL team we believe it can support our market as we see it all today,” Goldman said.
The company has worked to build its business beyond the strong weeks of Valentine’s Day and Mother’s Day, Goldman said, including building subscription services for customers that want to send regular gifts.
Ultimately, Goldman says the company plans to keep giving customers new ways to send happiness to their friends, co-workers or clients.
"We are all about sending and adding a bit more joy to people’s days. That's the long-term north star,” Goldman said.
Which bouquet is Goldman's favorite? That happens to be the firecracker, which he says features the colors he loves, the oranges and the yellows, as well as golden craspedia, a yellow pompom looking flower which last even after the rest of bouquet eventually dies.
UrbanStems's latest round builds on the company's $12 million raise in 2019, when they also promoted Goldman, then the chief operating officer, to the top slot as CEO. He replaced co-founder Ajay Kori, who remains chairman as he starts up another venture of his own, this time in the health care realm.
UrbanStems has also inked partnerships with Vogue and Bumble, as well as philanthropic efforts with the Breast Cancer Research Foundation, Trevor Project, ACLU, World Central Kitchen and Baby2Baby.
But with increasing demand, it's also facing increasing competition in the floral delivery industry, including from its own former teammates. Cameron Hardesty, who previously was head of products for UrbanStems, branched out on her own last July with startup Poppy, targeting florists and wedding planners.
