FTD just bought BloomThat, the on-demand flower startup that I first wrote about in July 2015.
Jenn Ok (then at NASDAQ) knew the guys as they were launching and sent me a flower delivery to put them on my radar.
They were heralded as the Uber of Flowers and it was a fantastic concept!
- Great app
- 90 minute delivery by bike messenger.
- Ashton Kutcher was an early investor.
- The flower presentation was the most beautiful I’d ever seen with outstanding attention to details.
- Unpacking the flowers was an instagram-worthy event, surprise after surprise.
What was not clear: how they could make money.
- And apparently they couldn’t, nor could they maintain their 90 minute delivery.
- Their burn rate at the time was $560,000 per month – that’s a lot of flowers to sell!
- When they went nationwide, they could only offer next day delivery which put the nail in the coffin.
All I could find on the acquisition was that FTD got them “for a small amount of money.” Sad ending but not surprising when the financials don’t add up e.g. the beautiful flowers with all that incredible packaging (see photos in link above), was priced at $32. There’s no way to make money at that rate.
Read on below for more.
Prior to this reported acquisition, BloomThat had raised $7.5 million from investors like Rothenberg Ventures, Forerunner Ventures, Sherpa Capital and others, with the most recent round in April 2015.
- In February 2016, BloomThat launched its flower delivery service nationwide.
- Instead of offering delivery within a couple of hours, BloomThat guaranteed next-day delivery, which effectively moved the startup into the territory of 1-800-FLOWERS and FTD.
Unlike many other on-demand companies, BloomThat relies on three key services for its deliveries:
- FedEx, UPS and Deliv.
- Before tapping FedEx, UPS and Deliv to handle the actual deliveries, BloomThat managed their own deliveries and owned the logistics from end to end.
- By changing the logistics around delivery and implementing delivery fees, BloomThat’s burn rate dropped from $560,000 to $15,000 a month.