By Chris Langford, Partner
We at IDEA Fund Partners want to continue to provide insights into the investments that we make to provide a better view into how we underwrite and what excites us as investors. Although a bit tardy in its writing, we are excited to detail our thinking about the investment we made in Poppy at the end of 2020. Poppy is a digital-first platform that brings together brides- and grooms-to-be with on-trend design, farm-direct flowers and top notch local floral arrangers to deliver an Instagram-worthy wedding and a modern purchasing experience at or below the cost of a traditional florist. At first, you may be wondering what is so compelling about the wedding flower market that would interest a venture capital firm. My answer: an exceptional founder addressing a huge, underserved market via a differentiated experience with compelling economics.
Our interest in Poppy really starts at the top with CEO Cameron Hardesty. At IDEA Fund, we underwrite founders based on a combination of expertise, character and propensity for exceptionalism and Cameron exhibits each of these in spades. On the expertise front, she has a lifelong love affair with flowers and began her formal education on flowers while in her role at the White House in the Obama administration. This combination of love and education landed her as the head of product at UrbanStems, a high growth tech-enabled florist headquartered in Washington, D.C. where she learned what it takes to go from zero to scale in the flower business. In addition to this expertise, Cameron is a strong communicator and inspirational leader who combines the perfect levels of high conviction with malleability and humility. Finally, her history as a college athlete at a premier academic institution and challenging professional roles signaled a strong track record of facing challenges and striving for excellence. As one can imagine, a leader like this attracts a strong team to join the mission and Poppy is no different with strong technical, operational and industry backgrounds all around.
A strong team is a great starting point for success, but to achieve a venture return a company must be focused on a huge market opportunity. The flower market is roughly $13B annually in the United States and half of that is spent on weddings. While several startups have raised venture capital to attack the other half that is spent on holidays or special occasions, almost none has gone to companies attacking the wedding market. Today, most of that market has been served by local vendors who a) have significant markups and minimums and b) utilize analog sales methods that include large binders, paper invoices and check payments. Modern brides and grooms are used to digital-first experiences, an endless aisle of curated options, just-in-time fulfillment, transparent pricing and digital payment. Poppy does all of this. When done exceptionally during the most high-trust occasion, it creates amazing “customer for life” potential for other flower-centric moments.
Finally, the wedding market provides compelling economics that other floral occasions do not. The average wedding flower order is between $1,500 — $2,000, but many wedding budgets go significantly above that. It is your special day and you want it to be everything you have envisioned. Flower budgets of $4,000+ are not uncommon for large weddings. Compare this to the average bouquet that is sent for Valentines Day, Mother’s Day or birthdays and you can see why this AOV is compelling. In addition to a great AOV, the forethought of the event enables two considerable advantages over other flower-related purchases: supply chain predictability and negative working capital. Wedding flowers are generally booked at least weeks if not months in advance which allows Poppy to provide its farms with ample lead times for production and eliminate significant spoilage from variances. It enables foresight in shipping and labor as well. Finally, wedding flowers require deposits and pre-payments that enable Poppy to pay for working capital needs through sales as opposed to capital. The combination of all these factors means that Poppy can provide an experience the generates value for everyone from the growers to the designers to the customers by serving as the tech and operational layer to optimize the value chain between each party.
We are so grateful and excited to go on this journey with Cameron and the Poppy team. Having launched a wedding flower business right into the heart of COVID, they have shown tremendous grit, resiliency and adaptability to not only survive but thrive. As life returns to normal this year and the pent-up demand for weddings unleashes a tsunami of demand, we are confident that Poppy will be there to serve the digital-native brides and grooms with the most exceptional floral experience to celebrate their big day!