Vancouver-based FinTech startup Blossom Social has secured more than $2.1 million CAD in seed funding to fuel the growth of its investing social network south of the border.
Nearly $1 million came from Blossom users through a recent equity crowdfunding campaign, while the more than $1.1 million remaining was provided by existing backer LOI Venture, new investor Goodwater Capital, and angel investors through simple agreements for future equity. This latest capital brings Blossom’s total funding to nearly $4 million.
Per FrontFundr, Blossom’s recent campaign set a new record for the platform.
Back when Blossom raised $750,000 in pre-seed financing a year and a half ago, the startup’s goal was to work with Canadian regulators to become the country’s first “social brokerage,” consisting of a social network app that also enabled Canadians to buy and sell stocks directly.
“We were trying to compete with the Wealthsimples, the Questrades of the world,” Blossom co-founder and CEO Maxwell Nicholson told BetaKit in an exclusive interview.
But as technology market conditions deteriorated and Blossom began to find product-market fit (PMF) with its existing app, Blossom abandoned this vision 10 months ago, eschewing the competition, complexity, costs, and geographic limitations associated with becoming a brokerage in favour of being a pure-play social platform.
“It was the wrong strategy, so we scrapped those plans entirely just to focus on being the investing social network,” said Nicholson. “If you think of LinkedIn as the social network for everything jobs and career, we’re building the social network for everything money and finance.”
Instead, the company’s latest funding will support Blossom’s recent expansion into the US, where it hopes to achieve the same level of adoption and market penetration as it has in Canada. It will also fund the firm’s product development efforts, which include adding an investing “super-chat” and a desktop app to complement its existing mobile platform.
Founded in 2021 by Nicholson, COO Annika Ng, CTO Kartik Bhutani, and CMO Brandon Beavis amid a boom in retail investing, Blossom is a social network for investors to share verified stock portfolios, trades, and investment ideas. The startup’s mobile app offers portfolio analysis tools, dividend tracking, and “Duolingo-style investing education.”
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Unlike Reddit, Discord, and groups like WallStreetBets, posts on Blossom are backed by real activity from users’ linked brokerage accounts. Since launching on Apple’s App Store and Google Play in 2022, Blossom has grown to serve more than 125,000 users, most of which are in Canada.
Last month, Blossom set out to raise $500,000 over one-and-a-half months via FrontFundr and did so within a day. To give more of its users a chance to participate, Blossom opened up the round to another $500,000, which it secured commitments for over the following three days. The CEO said Blossom was “overwhelmed” by the reception and interest.
“That honestly blew my mind,” said Nicholson. “I expected it to do well … but that was beyond even my most optimistic projections.”
According to FrontFundr, Blossom’s campaign set a new record for the Toronto-based equity crowdfunding platform, which has facilitated more than 175 transactions over the past eight years. “It was the single biggest launch day we’ve ever seen,” FrontFundr founder and CEO Peter-Paul Van Hoeken said in a statement. “It was incredible.”
“Crowdfunding can sometimes have a bad rap, but for us, it’s just such a perfect fit for our product,” Nicholson said. The CEO expressed confidence that as users of Blossom, investors understood the risks associated with investing in an early-stage tech startup like Blossom, noting that the company attempted to convey them clearly in its pitch.
Beyond just capital, Nicholson said raising money in this fashion has helped build a “true cohort of hardcore advocates and supporters” consisting of 793 Canadians, which put an average of $1,277 apiece into Blossom.
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The startup’s latest round comes amid a challenging fundraising environment for tech startups more broadly, and FinTech companies in particular—especially businesses that cater to consumers. “It’s rough out there, especially in FinTech,” said Nicholson, who noted that the pullback in venture capital funding has influenced Blossom’s go-forward strategy.
Like many other tech startups, Nicholson said Blossom’s focus is now on building a sustainable and profitable company. “Gone are the days in 2021, where you have a wildly unprofitable business and you’re able to raise these wild rounds and just continue to go on that alone.”
The CEO described building a brokerage business as an “extremely capital-intensive” process and said he did not believe it was possible in the current VC funding market. Another factor that influenced Blossom’s decision to abandon this vision was Canada’s increasingly competitive brokerage landscape, Nicholson said, pointing to new entrants like WeBull.
“We have a very synergetic product with [existing stock trading apps],” said Nicholson. “Why would we throw that away and then become a competitor to them, when we have this great business that can work with them?”
RELATED: WeBull launches stock trading app for retail investors in Canada
Much of Blossom’s growth to date has been aided by its work with investing influencers like Beavis, a popular YouTuber, through its ambassador program. The startup intends to follow the same playbook in the US.
Originally, Blossom believed that the only way to truly monetize its platform was by layering a brokerage on top of it, but the startup’s results to date as a social network point to another path forward that Nicholson believes is viable: brand partnerships.
Today, two-thirds of Blossom’s revenue comes from brand partnerships with players like Canadian exchange-traded fund providers, while one-third is derived from paid subscriptions, which give users extra investment portfolio tracking and analysis tools. According to Nicholson, Blossom is currently adding more than 10,000 new users monthly and is on track to hit $1 million in revenue this year.
Blossom has brought on Wattpad alum and Couply co-founder and CEO Tim Johnson as head of brand partnerships to scale the startup’s efforts on this front. Johnson previously helped the Toronto-based community storytelling app Wattpad scale its revenue from $3 million to $36 million as their director of brand partnerships. He also grew the relationship-improvement app Couply to more than 400,000 downloads.
RELATED: Ex-Wattpad employees close $300,000 to build relationship-improvement app Couply
Earlier this month, Johnson announced plans on LinkedIn to transition the company “from startup… to side project.” He claimed that while Couply’s app “had some good metrics—we didn’t have true [PMF].”
“Working at Wattpad I know what true PMF is,” wrote Johnson, who expressed skepticism that Couply could find a way to do so in time to raise another funding round with its remaining runway. Toronto-based Couply, which previously won the Collision Conference’s startup pitch competition, closed $300,000 in pre-seed funding in 2022.
Blossom has hired Wattpad alum and Couply co-founder Tim Johnson to be its head of brand partnerships.
Johnson said Couply gave its investors the option of having their money returned or staying the course, and approximately half chose each path. Going forward, he plans to continue working on building Couply alongside co-founder Denesh Raymond part-time as “a long-term side project.” According to Johnson, without his salary, Couply is profitable, which puts the app in a better position to invest in new features and refinements over the long run.
For his part, Nicholson said that Blossom is on track to become cashflow positive in 2025. The CEO said that when Blossom goes out to raise a Series A round, the company aims to be in a position where it is looking to add more “fuel to the fire,” rather than seeking capital out of necessity.
“Startups where they’re having to raise out of necessity in this climate are in a very, very dangerous spot,” he added.
“The [Blossom] business we have, I think there’s huge growth potential there, but also with the brand partnerships, with the pro subscriptions, we have a very clear path to making this default alive,” said Nicholson.
Feature image courtesy Blossom Social.
