NEWS

Announcing Carats & Cake Series A Financing

BY JESS LEVIN CONROY / 09 22 22

Three years ago, in the fall of 2019, Carats & Cake was at a turning point. We’d been working for seven years as a partner to brands in the wedding industry. We had spent countless hours with vendors - from the smallest boutique florist to the most extravagant venue - hearing their challenges, needs, and dreams. 

Every year businesses in the event industry rely on the power of their brands, the beauty of their work, and referrals from past customers to bring in a whole new crop of customers for the year to come. Back in 2019, we were successfully helping them with this effort already, but we knew that the opportunity to make a more meaningful impact existed and we knew that venues were the right category for our B2B focus as they represent ~60+% of overall event spend. 

We began to talk to select event venues about the pain points in how they do business and we found that for all the incredible talent they have to pull off the events themselves, the tools and platforms they had to improve their operations, cashflow, and margins were sorely lacking. 

The event industry unfortunately doesn’t get much respect. As is so often the case, categories that people stereotype can often go overlooked for years - or even decades - when it comes to solutions for digital transformation. Yet in the US alone, this industry represents $100B each year. We knew if we could build out an industry-specific platform for venues that was easy to use and provided immediate ROI these teams would at least hear us out. 

We began raising seed capital for this idea in mid-2020 as the pandemic was in full swing. The opportunity was to invest then so that the platform would be ready when events came roaring back despite that timeline being unclear in the moment. Some of our key innovations were to provide not only digital contracting and invoicing, but also digital payments capabilities, which had never become commonplace for special events. Our payments solution allows for flexibility inclusive of how people want to pay, as well as what we call “pay-in-four” with the venue providing an option that enhances their cashflow, while enabling consumers to manage their budgets more effectively. Behind the scenes, this effort required an initial debt facility, which we set up with Moore Specialty Credit and announced late last year alongside nearly $10M in equity financing (Forbes) from some incredible investors including Acrew Capital, 1Sharpe Ventures, Founders Fund, Correlation Ventures, and GMO VenturePartners. 

We went to market with V1 of the platform in January 2022 and the response from the industry has been staggering. In just nine months we now have over 300 properties working with us to enhance their sales and marketing operations with the industry’s first purpose-built revenue optimization software. Our original marketing tools are now part of a much larger stack, which catering and sales managers can easily access, customize, and utilize to understand their customers better, convert them faster, and ease their experience with the brand at every step. Interestingly the majority of customers (75%) choose to pay their invoices in full - “marry now, pay later” as The New York Times put it is merely a feature, not a product (we also don’t allow any payments to be due post-wedding to reduce risk for our venue partners and ourselves, but that’s for another blog post!). Yet consumers certainly do value a mobile-first, flexible payment solution. No more PDF credit card authorization forms! 

In order to build out our platform we began to fundraise for our Series A in Q2 of this year. While certainly not the best timing for either of our capital raises, our investors saw the traction and scale of the opportunity as 2022 became the “Boom Year for Weddings” with over 2.5M events expected to occur by the end of the year. The platform we’ve developed applies to any event a venue may host, and our brandable, digital solutions are proving day-in and day-out to close dates faster for the properties that work with us. The appetite for additional capabilities is real, the invoices getting paid faster through our pipes are material, and the opportunity for special events to contribute more to the bottom line for venues and property groups has never been more evident.

It’s with this clarity that 1Sharpe doubled down to lead our Series A, which we’ve announced today bringing our total capital raised to just shy of $30M. We’re excited to welcome new investors including SilverCircle and Argosy Capital, and to have Gregor Watson of 1Sharpe join our board. His experience as an operator through both good and volatile times have helped shape our B2B focus and future product plans meaningfully.  

For so many people - and in so many ways - the last few years have been uniquely challenging. Carats & Cake is now a ten year old “startup” with 1,000s of long-standing relationships with the leaders in our industry. We firmly believe that events are the biggest revenue opportunity in hospitality as “heads in beds” and food and beverage have already been tapped and optimized. We come to our offices each day to ensure every venue, property group, and asset owner has the tools they need to truly operationalize all special events.  

Thank you all for being part of our journey, 

Jess