Flower delivery startup UrbanStems raises $12M to fund national expansion

UrbanStems is announcing that it has raised $12 million in Series B funding.

CEO Seth Goldman told me the startup has already been using the money to expand nationally. He explained that UrbanStems now has two delivery models — there are bike couriers who deliver plants and flowers within two hours in New York City and Washington, D.C. (where the company is headquartered), and then there’s a third-party shipping partner who offers next-day delivery to anywhere else in the United States.

The company started out with bike couriers, and Goldman said it’s not abandoning that strategy: “We will find areas where there’s enough demand to warrant jumping in, boots on the ground.”

At the same time, he said next-day shipping has allowed the company “grow a lot faster in the short term.” (Regardless of method, UrbanStems does not charge an extra delivery fee.)

Recent initiatives include a partnership with Vogue, with bouquets created by Vogue editors. In addition, the company has been expanding beyond flowers (where prices start at $35) and plants ($50) by offering curated gift boxes ($55). It sounds like Goldman has plans to do more in this area, too.

“The gifting market is far bigger than just the flower market,” he said. “We are providing more than a product … Gifting itself is a highly emotional, vulnerable experience. [You want to] make sure it gets there successfully, make sure it gets there on-time, make sure they love it, it’s packaged well, every little detail feels personal and special.”

The round was led by SWaN & Legend Venture Partners (who also led the startup’s $6.8 million Series A) and Motley Fool Ventures, with participation from Middleland Capital, NextGen Venture Partners and Sagamore Ventures.

“We are excited to continue to invest in the growth of UrbanStems,” said SWaN & Legend Managing Director David Strasser in a statement. “We continue to be impressed with the team led by Seth Goldman, as he builds on the strong foundation the cofounders laid out in building the pre-eminent gifting platform of the future.”

The funding came after a leadership change at the company, with Goldman (who joined as COO in 2017 after serving as CEO for HelloFresh USA) taking over the chief executive role from co-founder Ajay Kori in May of last year.

When asked about the transition, Goldman noted that Kori remains involved as chairman of the board, and he said, “We partnered a lot on this and kept our team from making it feel like it was a huge deal — which is a weird thing to say, even though it is a huge deal. But I was already managing more than half of the headcount of entire team across the company … so they knew what they were getting with me as a leader.”