Why we are investing in Patch Plants

October 8, 2019

https://www.patchplants.com/gb/en/

 

If you walk around Shoreditch on a Sunday afternoon, you will encounter bunch of trendy millennial and young Gen Z with plants (big and small) on their arms. They just bought them at the Columbia Road flower market, a hot spot for the local and (not local) hipster. 

 

Millennials and Gen Z love plants. With many millennial delaying parenthood, plants become the new pets, fulfilling a desire to connect to nature and the blossoming wellness movements

 

Social media have fuelled a resurgence in sales of indoor plants. Searches on Google for “live plants” increased 82% year on year.

 

In addition, plants are super instagrammable…..

 

However, there is a problem with the plants bought on Columbia Road Flower Markets and other markets in general: their quality is low.

 

Plants (as Bonds), are classified by rating in terms of quality:

 

A1 (top plants)

B1

B2

C1…

 

And the plants sold at the Columbia Flower Markey are B and C quality, usually bought at auctions by the sellers on a Thursday.

 

Buying plants is an antiquated process and the supply chain for plants that has not changed in the last 30 years; 

 

70% of the plants sold in the UK are coming from Holland and distribution to the final customers involved several actors in the supply chain.

 

That’s why I decided to invest in Patch (https://www.patchplants.com)

 

Patch is a direct-to-consumer brand transforming Europe’s $25bn plant market with a mission to make modern life greener; 

 

Patch buy plants directly from the growers and distributors in Holland, allowing the consumer to receive a higher quality product for a cheaper price.

 

The competitive advantage of the company is based on its strong brand and on the operational efficiency.

 

The company do not hold any inventory and make purchase on a daily basis through the Holland growers and distributors (that’s means that the company is Working Capital positive);

 

Patch sell the same quality level of plants of Garden Centres (A1 plants), but its 50% cheaper considering that buy plants directly from growers.

 

Freddie (co-founder and CEO) is great founder with huge branding and marketing experience and has helped shape some of the most well-known brands today such as Virgin, King and Cancer Research. 

 

He was able in just 24 months to transform Patch into a logistic machine, able to send top end plants from the best growers in Holland to an address in London overnight. 

 

The market cannot be more attractive: just in London and Paris it’s a £1.2bn market with an online penetration of less than 5% and compared to the other e-commerce sector the return rate is super low (4% vs. 30% in the fast fashion market).

 

I believe that the future will be greener and Patch will help the new generation to live a healthier and greener life. 

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