How Bloomydays bankrupcy shows lack of longterm investor interest
Bloomydays filed for bankrupcy yesterday. A sad day for the team, the employees and early stage investors.
It was a mere 5 years ago when Bloomydays and MIFLORA were founded and went head to head to disrupt the flowers industry. Both with a different approach, but we knew that something would need to change in this industry. Bloomydays flower subscription model showed tremendous potential. The execution was top notch and soon they became on of the most beloved startups in the German Startup scene.
Although we at MIFLORA did not have the exact same approach on how we could sell flowers on the internet, Bloomydays did help us a lot. Together we were able to raise the attention of investors and industry giants alike. Our no-nonsense customer centric way of working was and is a delight to the old fashioned flower industry.
Shocked and sad that it had to end this way
It was quite a shock for me personally to see that Bloomydays were forced to give up. Quite honestly, it simply makes me sad. Setting up a new business and changing an industry takes time. And this business model is one that needs time to fully enfold. The floristry market is highly regulated by 1-2 huge players and suppliers. In order to create the margins you need to be successful, you need to build up relationships and this takes time.
B2B sales and purchasing cycles simply take a lot of time. Closing a substantial customer can take up to 9-12 months if it is done right. I do not have the in-depth insights into Bloomydays setup, but I can imagine that this is one of the main reasons they struggled.
B2B-focussed business models need longterm backing from their investors. In the case of a flowers business, not so much to fund the COGS/Operations, but to fund the human capital that is needed to build up customer relationships and dig deep into the supply chain. The fact that Bloomydays were not able to convince their investors to continue to fund their journey just comes to show the short term focus of investors today.
Either your startup manages to disrupt an industry within 3-4 years, or you are out. I wished investors would try to understand the industry dynamics more before taking decisions such as these. I can only speak from my own personal experience, but I feel that many investors are too far away from their portfolio companies. They do not really make the effort to guide, support and help their investments go the extra mile.
What does this mean for us at MIFLORA
At MIFLORA we have been very blessed with the strong team that is behind the team. Tobias Mazet and the Venture Stars team have done a great job so far at communicating with our backers and proactively involving them in our progress and developments. I sincerely hope that this will help us go the extra mile.
The flowers business is incredibly hard work. Sourcing, logistics, working with fresh goods that go bad within days (!) and low interaction rates with the receiving end consumer make it a very challenging business to be in. However it can also be gratifying to work with such a beautiful product that makes so many people smile.
I don’t really know what this will mean for us at this point. I can only hope that we will continue to get the fantastic support and backing of our investors. Their support for the team has been grand so far. I know that we can only continue to work hard. We need to communicate openly and a lot with all stakeholders and give it our all.
Although I am not operationally involved with the team anymore, I know that Tobias and the full team behind him are giving it their absolute all.
I had wished for the Bloomydays success story to continue. And I am truly sad that it has ended this way. I wish the full Bloomydays team a lot of strength and luck for the future.