As more and more individuals, especially Millennials, move into urban apartments, they look for some organic life to fill their space, especially with trends in delayed parenthood and home ownership. Animals can be difficult to care for when traveling, so what better way to fill that vacuum of loneliness than a plant? 

Purchasing plants, however, can be difficult as the industry is incredibly fragmented with most sales happening at brick-and-mortars. In fact, in the $48B gardening industry, less than 10% of sales happen online. Additionally, the diversity of care plants require can intimidate first-time plant buyers. Lastly, individuals in general are busy and want something more convenient than a brick-and-mortar where they can purchase plants.

Enter Leon and George. Leon and George is a new-age shopping experience for individuals looking to make beautiful and stylish indoor greenery easier by offering a curated selection of premium plants and ceramics, pre and post-purchase support, and delivery directly to individuals’ doors. Leon and George is offering individuals interested in indoor plants an experience that prioritizes convenience, quality, and service. Think of direct-to-consumer startup Casper – Casper brought premium mattresses directly to consumers via an online experience. 

In the $48B gardening industry where less than 10% of sales happen online, there’s plenty of growth opportunity for an ecommerce startup to take market share from traditional sellers. When looking specifically at house plant sales, sales have increased 50% in the last three years to $1.7B, according to the National Gardening Association. Whether an individual wants small houseplants like succulents or a larger birds of paradise plant, Leon and George is there to bring plant lovers the plants they want along with advice to keep them healthy. 

Leon and George’s business model currently revolves around selling and shipping plants to individuals and businesses through its online store. A growing portion of the business can be attributed to B2B sales to large organizations like Flexport and Indeed. The startup also provides plant care and advice on individual plant pages. According to the team, they boast an average order value of $351 with an 18% repeat customer rate. Additionally, the company’s contribution margin sits at 48%. 

*From Leon and George

A quick look-through of the site and plants provide a better glimpse at price points. For example, an 8” pilea peperomioides plant (or a Chinese money plant for those in the know), costs $74. From anecdotal experience, I’ve seen such plants go for less than a ¼ of that price at Trader Joe’s or for $16 on Pistils Nursery. A 3’ fiddle leaf fig on Leon and George retails at $249, where on Amazon you can purchase the same plant and size for $39.99. It also seems that the cost of plants on the startup’s online store includes pot, delivery, and post-purchase support. Even with the additional value components, we’re not sure if that justifies a more than 4x differential. It remains to be seen how long the startup can keep charging such a premium on plants especially as more startups and companies enter the space and crunch D2C retailers like Leon and George on price.

Leon and George is offering a SAFE at a $9M valuation cap. There is a minimum investment of $100 with a $25K pro rata right threshold. To date, the company has received $124K in funding through Wefunder.

Ron Radu is the co-founder of Leon and George. Ron was previously at American Express where he worked as a Senior Product Manager at Amex Mobile. Before American Express, he was a Product Manager and Designer at Palomino Labs which was acquired by American Express. Ron is a graduate of Boston College where he received degrees in Information Systems, Marketing, and Studio Art. 

Nicolas Bartoli is the co-founder of Leon and George. Before starting Leon and George, he was a Growth Product Manager at WyzAnt Tutoring. Prior to this, he was the Technical Product Manager for Merchant Atlas. Before Merchant Atlas, Nicolas was a Front-End Software Engineer at Mobile Spinach. It seems both Ron and Nicolas have some experience at startups, but are not previous founders themselves.

Barbie Lucio-Bartoli is the Chief Brand Officer at Leon and George. Barbie has extensive experience as a Program Manager and Project Manager at Amplifier Strategies and Google. 

The Leon and George team are alums of Y Combinator’s S17 batch and are backed by Day One Ventures, a firm helping its portfolio companies with marketing and PR. The company needs to find venture backing from investors specializing in the D2C space and/or with a deep understanding of supply chain logistics. We would like to reiterate that this is the team’s first entrepreneurial venture and could benefit from individuals investors or advisors with experience in the D2C space.

1. Traction: The startup has amassed over $3M in revenue and over 10K customers in over 2 ½ years. The company sees average order values of $351 and an 18% repeat customer rate. A growing part of their business is focused on B2B sales to organizations like Flexport, Indeed, and Facebook. Lastly, they’ve gathered all their traction whilst only focused on California. We like the company’s traction and we believe they are poised to grow even larger in the next year.
   

   *From Leon and George

    

2. Market Trends: The gardening industry market sits at $48B with houseplants specifically growing over 50% over the past three years to $1.7B. In an increasingly digital world, the plant industry has lagged behind with less than 10% of sales happening online. Millennials are the main drivers of growth in this industry due to many Millennials moving to urban areas, delaying parenthood, and wanting to “connect with” nature in some way.

   Plants have become the trendy “pet” to own that carry an aesthetic that Millennials can capture and showcase to their friends on social media while also being low maintenance compared to dogs and cats. Startups like The Sill and Bloomscape are catching on to the trend of Millennials wanting a little more greenery in their urban dwellings and have received recent venture funding. Leon and George is poised to ride this wave of popularity with strong traction and branding.

3. Growth: The growth opportunities available to Leon and George are immense. The startup currently only delivers to San Francisco and Los Angeles. Expanding to other metro areas like NYC and Seattle provides a massive growth opportunity. On the product side, the company can potentially sell larger plants and trees to homeowners in metro areas looking to dig deeper into gardening. The company can even open retail spaces in large metro areas to sell plants and provide consultation to interested individuals and businesses. Lastly, the growing B2B sales are an intriguing avenue that should be further developed. There are numerous growth opportunities available to the startup which should be very attractive to potential investors in Leon and George.

4. Exit Opportunities: The exit opportunities in this industry are plentiful and could yield great early returns. The most likely exit opportunity given the size of the industry and fragmented marketed is either a merger with another startup like The Sill or Bloomscape or an acquisition by a large retailer like Home Depot.

   Given Home Depot’s past acquisitions, it’s unlikely they would be acquirer. The Home Depot has mainly acquired companies in its immediate domain of home repair and supplies and haven’t acquired a tech startup until its recent acquisition of Askuity. Given Leon and George’s premium branding, it’s unlikely a retailer like Walmart acquires Leon and George either.

   An interesting acquisition opportunity would be for Wayfair for acquire Leon and George. Given Wayfair’s focus on furnishing the home, an acquisition of a startup selling premium plants makes sense. Additionally, the growing popularity of plants and its aesthetic complement Wayfair’s business. Lastly, the Leon and George team have already nailed down the difficulty associated with packaging and shipping plants of all sizes. Wayfair, however, hasn’t been particularly active in the M&A space as they’ve only acquired four companies in its lifetime.

   We aren’t sure who would acquire Leon and George, but the startup has developed the supply chain for D2C house plants and a retailer looking to bolster its interior design offering with premium plants is valuable. Lastly, I pointed out a merger with competitors like Bloomscape and The Sill as they all focus on providing quality service and plants directly to consumers and it would make sense for consolidation to take place in the future as a dominant company eventually emerges.

The gardening and houseplants industry is an antiquated, growing, trendy, and fragmented market. With the rise of online shopping, it only makes sense to create a new-age shopping experience for the gardening industry. The rise and popularity of Instagram, as well as living in concrete jungles like New York City and San Francisco have left urban dwellers yearning for a pretty and easily cared for pet. The variety, beauty, and manageable price points of houseplants make them great additions for any Millennial. Today’s technology allows buying and receiving plants convenient and Leon and George is poised to become part of the solution for the growing $48B industry.

Leon and George, like most startups, has obstacles to overcome. Competitors like The Sill and Bloomscape have received major funding of $5M and $7.5M, respectively, and are backed by institutional investors and advisors with deep expertise in D2C businesses. The Sill and Bloomscape have seen just as much traction as Leon and George. Additionally, the fragmented nature of the industry means these startups also compete with large retailers like Lowe’s and even Amazon as well as small businesses. The increasing popularity of the space will also invite others to compete with Leon and George. Leon and George has performed well with less than $500K in funding thus far and can truly scale and ramp up their efforts with more funding.

Given the company’s financial traction on little capital raised, we believe this is a great investment, especially with a valuation cap of $9M. It’s very likely the company raises another round of venture funding from institutional investors, thus it would be better to invest now than later. The company is poised to grow, expand its geographic reach, and develop its burgeoning B2B business. As the company becomes more successful, it becomes more likely the company will find investors and advisors who provide the strategic value that the team needs. 

It isn’t likely that Leon and George reaches unicorn status, but early exit opportunities exist in either a merger with one of its competitors or in an acquisition by a large retailer. The team is well-rounded and experienced, but a signature D2C investor who can provide guidance in the increasingly competitive D2C plants space. Leon and George’s choice to crowdfund its current raise is an interesting and smart strategy to market the business to the exact type of people interested in plants and equity crowdfunding: Millennials. With that said, we believe this is a Top Deal as the startup has made significant traction in its short lifetime, it being in an antiquated industry, the increasing urbanization of the US, the growing popularity of plants, and the plentiful exit opportunities.