August 27, 2012, 12:01 PM

H.Bloom grows a new online floral market

With $18 million in backing, the subscription service plans to expand to 25 cities.

Lead Photo

Flowers from H.Bloom.com

Backed by $18 million in venture capital, H.Bloom Inc. is a small but quickly growing online retailer of flowers, whose 2011 sales increased sevenfold year over year to $2.1 million, CEO Bryan Burkhart says.

The retailer, which launched in April 2010, operates an online flower subscription service that lets businesses and individuals order regular deliveries of fresh flowers. Prices start at $29 per order, and customers can choose weekly, biweekly or monthly, with no additional fees for delivery.

H.Bloom’s subscription business model helps the retailer get a good handle on customer demand and avoid what Burkhart says is an average 30% to 50% spoilage of flowers sold by traditional floral retailers. By comparison, he says, “our spoilage last year was 1.2%.”

H.Bloom is offering the subscription service in four cities—New York, San Francisco, Chicago and Washington, D.C. But it plans to extend the service within five years to some 25 cities in the United States and Canada, Burkhart says. The retailer, which is based in New York, employs about 65 people. It maintains in each city where it operates a small team of floral designers, marketing staff and delivery drivers.

The retailer also offers one-off sales of flowers on its e-commercesite, HBloom.com, where customers can choose floral arrangements for one-time purchases or as part of a subscription plan. The HBloom.com e-commerce site was developed in-house on Microsoft Corp.’s .Net technology. The retailer developed in-house on proprietary technology its systems for connecting with suppliers and customers for order processing and fulfillment.

Backing the retailer’s growth plans is $18 million in venture capital that it has received in three rounds of financing. Its most recent round of funding, for $10 million in April, was led by Shasta Ventures with participation from Battery Ventures and individual investors including Brian Lee, founder of ShoeDazzle.com Inc., Legal Zoom and Honest Company. ShoeDazzle is No. 217 in the Internet Retailer Top 500.

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