There’s a heck of a lot of money to be made in flower delivery in Southeast Asia, according to an ex-Googler from the U.S. who left the search giant in June to launch his own startup in Singapore. He is by no means bucking the trend: We’ve written before about top people at Google looking to new opportunities in Asia.
The 27-year-old Steven Feiner, who worked as a San Francisco- and Singapore-based “problem solver” in corporate strategy and data analytics at Google for three years, said he’s dipping his toes into a $2.5 billion regional opportunity. Feiner just launched his flower-delivery startup, A Better Florist, at the end of September, and it’s currently in the midst of closing a $500,000 angel round.
In the barely four weeks since launch, business has been good, and the company has been cashflow- and unit economics-positive from day one. Feiner and his three cofounders said they’re distinguishing themselves from the competition by delivering flowers sourced from nearby Malaysia (the Cameron Highlands, specifically) that are just 2-4 days old when they reach customers — that’s compared to 10-16 days old for most flowers in the market today.
While $2.5 billion may seem like a surprisingly large market for the still-emerging Southeast Asia region of 600 million people, the flower market globally is actually worth around $60 billion, according to Feiner. 1800 Flowers and FTD, with $1.12 billion and $1.27 billion in revenues last year, respectively, are leading the charge.
The established market leader, by all accounts, is Far East Flora (FEF), with one industry source telling VentureBeat they saw “several hundred million dollars” in revenue last year. But FEF is still lagging on the mobile experience, and deliveries take up to four hours. In the coming months, Feiner wants to start offering guaranteed 90-minute delivery at no extra charge (the option will be available at checkout). (A Better Florist is still mobile-optimized Web only, with no mobile app planned).
In its first week, A Better Florist saw 35 orders, and it’s gunning to hit 100 orders in its fourth week. After two years, it wants to be seeing 1,000 order per day, with expansion plans for Kuala Lumpur (Malaysia) and Bangkok (Thailand). BloomThat reportedly does around 500 orders per day in San Francisco, alone.
“There is nothing I wouldn’t do for our customers,” Feiner told VentureBeat in an interview. “If we have to jump in an Uber to deliver our flowers on time, then we will. We are huge fans of doing things that don’t scale.” A cash-on-delivery option will be rolled out soon, and a Valentine’s Day campaign with Uber Singapore is in the pipeline, as well as a 1,000-rose-giveaway with regional dating app Paktor for Single’s Day on November 11.
There’s actually quite a lot of venture capital-backing going on in the flower-delivery space. Feiner points to funding from top-tier investors including Y Combinator, SV Angel, and actor-turned-angel Ashton Kutcher (see here). Venture capital firm Andreessen Horowitz led a $5.5 million Series A into BloomNation in October last year. There are a few more notable examples (see the end of this article).
In all, about seven flower-delivery startups have raised nearly $40 million in the last 18 months, with $30 million of that coming in just the last 12 months. And that’s not limited to the U.S. — these figures include startups from Europe and Asia.
There are also a few notable mergers and acquisitions going on. Roses Only was bought for $30 million last year in February by FlowersCorp, ProFlowers for $430 million last year in July by FTD, and Harry’s & David for $143 million last year in September by 1800 Flowers.
In terms of future plans, A Better Florist hopes to emerge as a $100-million acquisition target within three years — assuming Feiner and the team can execute as the business grows — if not for a regional player, then perhaps for one of the bigger global players that want to expand their footprint into Southeast Asia.
So, just another Googler-turns-entrepreneur jumping on an opportunity in the growing on-demand economy that all the big tech companies are eyeing? Or the birth of Singapore’s next success story? As that tired old cliché goes, we really will have to wait and see. But this is certainly one to keep an eye on.
Oh, and here are some of those other notable flower-delivery startups that have landed funding lately:
- The Bouqs (U.S.) — $6 million Series A in June 2014.
- Urban Stems (U.S.) — $1.5 million seed in February 2015.
- Bloom & Wild (U.K.) — $3.9 million Series A in July 2015.
- Bloomon (Netherlands) — $4 million Series A in Sept 2015
- RoseOnly (China) — $10 million Series A at a $100 million valuation in November 2014.