Instead of starting at his new job, Folger spent his three months gardening leaving deciding to set up his own, er, gardening, business.
He launched The Stem, a “one-stop-shop for all things green”, selling indoor and outdoor plants, dried flowers, grow-your-own sets and pots. Turnover is set to hit £2 million this year.
Turnover: £1 million in 2021
“I’d taken the well-trodden path into investment banking — completing internships and working at Goldman Sachs and Jefferies International before spending three years at Rothschild,” Folger, 29, explains.
During gardening leave before a new role, however, Folger found he “loved being surrounded by plants and nature, and with a long-standing interest in e-commerce, the idea of selling plants online suddenly seemed very obvious.”
He spent summer 2019 brainstorming and creating his brand, The Stem, before paying an agency to make a website, which took six months. He sourced plants from wholesalers and “photographed them in the street as the lighting was too bad in my flat”.
“I needed somewhere to keep the plants, so I found the cheapest space I could in London — a 100sq ft unit on the second story of an old Victorian warehouse in Wembley,” Folger adds. “Only, the goods lift didn’t work and the plant trolleys didn’t fit.”
The next step was delivery: “I thought the easiest way would be to do it myself, so I bought an electric van and swapped working on £10 billion M&A deals to hand-delivering plants around London.”
The entrepreneur launched his business in March 2020 — just as the world was shutting up shop for lockdown.
“Being a pandemic baby really helped the business gain initial momentum,” Folger explains. “We went from 30 orders in March to more than 300 in April.
“It was just me doing everything, from planning delivery routes on Google Maps to ordering stock, delivering orders — although since it was in lockdown, at least I didn’t have to worry about the traffic — then customer service and managing our Instagram.”
To begin with, Folger was entreating his friends to buy plants, but sales surged via Instagram: “I initially grew the account to 10,000 followers by constantly growth-hacking — following and unfollowing people to make the account grow. I did it so much that I got blocked a few times.”
By January 2021, annual turnover was £1 million. The Stem — which Folger first funded with £6000 saved from his banking career plus a £25,000 start-up loan — launched a crowdfunding campaign on Crowdcube. It raised over £500,000, well above an original £150,000 target, with backers including an early investor in Bloom & Wild and fintech GoHenry.
Folger branched out (sorry) into Christmas trees early on: he ordered 150 to sell on, but they wouldn’t fit in his warehouse, so he had them delivered to his parents’ home in Essex.
“Each night I was driving up and down the A12, managing to fit around six trees in the electric van, then driving back to London to deliver them. The van kept running out of battery in the cold. But I think the customers appreciated the effort!”
Last Christmas, he sold 4000 trees — but the pallets were so large they too didn’t fit into his new, far larger Leytonstone warehouse: “We had to leave them outside the door and were really worried that they’d be stolen.”
There are already major players in UK online garden retail, but the total industry is worth £7.5 billion a year. Folger points out that online penetration is 40% lower than the retail average. Isn’t that because we like to see, touch and smell our plants before purchasing?
“Lockdown saw people gain the trust of online garden shops,” Folger says, “plus millennials have a much higher propensity to shop online, and as they grow into more core gardening consumers, the market will increase.”
As a London-only business, The Stem’s turnover was just over £1 million in 2021, “about 1.5% market share of the London indoor plant market,” Folger says. It’s now expanding nationwide.
“If we can achieve that same market share across all of our identified product sets and the whole of the UK, that represents an £85 million revenue opportunity,” he says. “That is what we are attacking with all our energy.”