Sexual wellness company Hello Cake has raised $4 million in seed funding as it readies its brand to go into select Walmart stores and online in July.
Co-founders Hunter Morris and Mitch Orkis met while working together on another brand. Orkis was at digital marketing firm Frank Collective and worked there with Morris on rebranding one of his other companies.
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The two got to talking about what they saw as an unaddressed market in the sexual wellness products space and the two went on to found Los Angeles-based Hello Cake and its Cake brand of products.
“Walking down most aisles is one option, but the products available have confusing ingredients and it’s hard to understand what to do with them,” CEO Morris told Crunchbase News. “On the other end is a sex shop, which is a place not everyone is comfortable being in. There is no middle ground when it comes to what to do and what to try. That exists in other categories, but in this one, no brand combines approachability or guides you down a path to understand the products better.”
Lerer Hippeau led the new investment and was joined by Sugar Capital, Brand Foundry Ventures, Selva Ventures, Silas Capital, Gabby Slome, Brian Bordainick and Kate Wallman. In total, the company has raised $5.7 million since it was founded in 2018, according to Orkis, who serves as Cake’s chief marketing officer.
Caitlin Strandberg, partner at Lerer Hippeau, said she met the Cake founders when they were raising money for a different product, and tracked them for more than a year. When they came to her with Cake, she wanted to invest.
She liked that Morris was a repeat founder and that Morris and Orkis had complementary skill sets. She also was interested in investing in a company that was going after sleepy incumbent areas where millennials and Gen Z consumers weren’t being served.
“This is a big space that investors have not traditionally invested in because they often trigger a vice clause,” Strandberg said in an interview. “Sex should be fun, inclusive, positive and safe. Cake has great content on its site on how to have sex and be safe. They also have entertainment, which is a whole other area. This brand is about everyone being included with all lifestyles not only accepted, but encouraged, and that is important.”
Cake is targeting the sexual wellness market, which in the United States was valued at $9.1 billion in 2019, and is expected to grow at a compound annual growth rate of 5.2 percent through 2027, according to market research firm Grand View Research.
Cake currently has four products: So-low Lotion, Toy Wonder, Tush Cush and So-Lo Stroker.
“We wanted to pair the name of the product with clarity on what the product is for,” Orkis said. “On the side of the box are instructions, and we also have education on our website. The first step is sexual education to get to know what you like and don’t like, and then how to communicate that with someone else. Then we go into the step of trying new things. We say our products are for the ‘bedroom curious’ a lot, and our content reads like skincare routines.”
Morris and Orkis plan to deploy the new funding into product development, marketing, scaling its inventory and manufacturing, as well as on its brick-and-mortar retail launch. According to Orkis, Cake has a big opportunity to reinvent the sexual wellness aisle of the story.
The company launched its products online in June 2020, and has experienced 470 percent quarter-over-quarter growth. It brought in just under $500,000 in revenue in the past month.
“Our products are meant to help people have fun, either by themselves or with a partner,” Morris said. “There are great spaces within sexual health, lubricants and toys that will be expanding for us.”
Courtesy photo: Cake co-founders Hunter Morris, left, and Mitch Orkin
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Sexual Wellness Brand Cake Puts Cherry On Top Of National Retail Launch With $4M Seed - Crunchbase News
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