Ordering flowers online can be a frustrating experience. You spend a small fortune, only to have the recipient get a bouquet that looks nothing like what you thought you’d ordered.
Onetime investment banker Farbod Shoraka had felt this disappointment. He’d also witnessed a dramatic decline in foot traffic and sales at his aunt’s flower shop since the rise of online delivery services. Shoraka believed the floral industry was ripe for change. So in 2011, he tapped friends David Daneshgar, a professional poker player looking to segue into business, and Gregg Weisstein, an MBA student, and began conducting research.
“Every single florist had the same frustrations,” Shoraka says. Leading online flower brokers took too big a cut, driving down florists’ profits. As a necessity, the florists cut corners, which doesn’t thrill customers. Deciding they could do better—and buoyed by $30,000 in poker winnings—the trio of thirtysomethings built a prototype for BloomNation, a marketplace for locally designed, hand-delivered floral arrangements.
Florists began lining up nationwide—and after raising $1.65 million in seed money, Shoraka and his team fleshed out their “Etsy for flowers.” By the end of 2012, BloomNation launched a site with 500 florist profiles.
Today the marketplace boasts some 3,000 U.S. florists offering same-day delivery of 45,000 handcrafted bouquets. Sales have grown at a steady 15 to 30 percent per month, Shoraka says. Last October, the Los Angeles-based startup closed a $5.55 million Series A round, led by San Francisco-based A Capital, with contributions from Andreessen Horowitz, Spark Capital, Chicago Ventures and Mucker Capital.
“They’re going after a market that seems ripe for disruption and is also a very big one,” says Ronny Conway, A Capital’s founder and general partner. “The U.S. cut-flower business is a multibillion-dollar-a-year business.”
BloomNation keeps 10 percent of sales made through the site; Shoraka believes this is significantly less than the proceeds of 1-800-Flowers.com and others. “We think of this as a local commerce platform for small businesses,” he explains. “They’re able to manage their business a lot more efficiently, driving down the price of sending a bouquet.”
To ensure product quality, BloomNation forbids florists from using stock photography on the site, a rule the company enforces with software that checks that images are original. In addition, customers receive a “BloomSnap”—a photo of the handcrafted arrangement they purchased—immediately before it is delivered. The site also features customer reviews of florists.
Since raising the $5.55 million, Shoraka has been adding engineers, marketers and customer-support staff. Among BloomNation’s expansion plans: an iOS and Android mobile app that Shoraka says will launch in the second quarter of 2015, and a wedding and events section of the website, where customers can get price estimates or schedule in-person appointments, expected to debut in the third quarter.
The company is also developing a suite of online services that BloomNation florists can use at no additional charge, including a tool for building their own websites. “So even if you go directly to their online flower shop, it’s a BloomNation experience,” Shoraka explains. Also in the works: point of sale, inventory management, customer management and analytics tools.
The plan is to collect 10 percent of online sales made by florists using this software.
“We’re here to increase their revenue,” Shoraka says. “For us, it’s about letting florists focus more on creativity, styling, design and service so that the consumer is wowed by their work and continues to go back to BloomNation.com or the florist’s own website. And then we can share in that.”