Bouquet business blooming

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This article was published 27/03/2021 (1834 days ago), so information in it may no longer be current.

For Callia Flowers, the Winnipeg technology-enabled flower delivery company, Mother’s Day is like Black Friday, Cyber Monday, Christmas Day and Boxing Day all rolled into one.

This year, the five-year-old startup — which is looking like it has the chance to be the next Winnipeg startup to successfully scale up — will have an additional $1.1 million in available capital to bolster the delivery of those popular Callia boxes to even more customers in the 55 Canadian cities to which is now delivers

It just closed its first round of venture capital financing, with the majority of that $1.1 million coming from three Saskatchewan funds led by Conexus Venture Capital Inc, the $32-million two-year-old fund launched by Regina-based Conexus Credit Union.

Lex Capital Corp. and Broad Street Bulls, also from Saskatchewan, also participated in the financing.

“We’re proud to be a Prairie company and it’s neat to see a venture fund come out of Saskatchewan that is able to make a bet on a startup like us and help us scale up,” said Callia founder and CEO Catherine Metrycki.

Like so many other great disrupters before it, Callia is using technology to provide a new and better experience to deliver a traditional retail offering — sending flowers.

It is a completely digital enterprise. Its easy-to-use web-site offers only three bouquets at any one time (as well as accessories like vases and gift sets) and promises delivery of the perfect “moment” — Callia’s term for its beautiful bouquets that arrive packaged in its signature box design — with only five clicks of the mouse.

The additional capital will help to continue its market penetration in cities like Toronto and Calgary to catch up with its initial activity in the Winnipeg market.

Over the course of the last year Callia has grown from servicing nine cities in Canada to 55. In the process its revenue tripled last year even with supply-chain challenges caused by the COVID-19 pandemic. Metrycki said the plan is to triple in size again this year.

With a staff of 25 in its Winnipeg headquarters and teams of warehouse, production and delivery people across the country, Callia continues to demonstrate that it can deliver exactly what it promises.

Considering the fragile nature of the product — flowers really struggle in extreme cold and heat — the company has an enviable error or complaint rate of less than 0.5 per cent.

Metrycki plans to use the additional capital to beef up her team across the country and increase its digital marketing to get more people thinking about sending flowers to loved ones other than on Mother’s Day or Valentine’s Day.

Speaking of which, she said, “We’re hoping for more balmy weather for Mother’s Day. Valentine Day was minus-51 with the windchill in Manitoba and the Prairies. That’s insane for flowers.”

Investors are definitely warming to the success Callia has already shown.

Sean O’Connor, managing director of Conexus Venture Capital Inc., said the fund does not go into its investments of between $300,000 and $3 million with any set timetable for exit.

“There is always opportunities to make money if you build the market leader and we absolutely believe Callia can become the North American market leader in its space,” he said.

While Metrycki was opaque about it, O’Connor said the company is starting to figure out how to get into the huge U.S. market.

“Every area of retail has its e-commerce play. But flowers are different,” O’Connor said. “It’s a finicky product. They have an expiry date. Taking the standard e-commerce play and dump it onto flowers does not work. Catherine has taken a different approach. She has built out her logistic network to make sure the quality is not sacrificed.”

Callia Flowers recently “graduated” out of the Manitoba Technology Accelerator, the same place that helped grow Skipthedishes.

Marshall Ring, the chief executive officer of MTA, said Metrycki prefers to downplay the size and scope of the company’s success to date. He said the momentum is such that as the company establishes itself in each new market it starts to get the benefit of the network effect.

“There are lots of recurring customers,” he said. “Once they hit critical mass that’s when new customer acquisition costs go down and the market starts to scale up.”

Ring said the relatively modest $1.1-million raise is a prelude to a larger capital raise contemplate sometime in the next 12 months.

“The strategy on this raise was to empower Callia to hit a valuation of $40 million for the next big round,” he said. “We took a bit of a nibble to get us prepared to drive valuation significantly.”

martin.cash@freepress.mb.ca