CAKE 🛍️

Setting the Scene

• Customer acquisition for consumer fashion brands is broken, with engagement more difficult than ever to capture.

• Challenges for brands:

  • Declining Loyalty: Gen Z and Millennials constantly switch between brands due to unlimited choices, no switching costs, and a lack of meaningful rewards or incentives.

  • Ineffective Channels: Traditional methods like digital advertising, influencer marketing, and wholesale are increasingly expensive and deliver diminishing returns.

• This week’s company offers a platform that bridges the gap between brands and consumers by delivering value to both.

In a Sentence

CAKE is membership-based platform that connects brands with consumers, who, in turn, gain access to exclusive perks from these retailers.

• Brands: Companies gain a performance-driven channel to acquire high-intent customers by offering discounts through the platform, which is still more cost-effective than traditional customer acquisition methods.

• Perks: Shoppers unlock exclusive benefits like elevated discounts, private sales, and unique brand experiences.

The Basics

• Industry: Retail Tech

• Headquarters: Boston and New York

• Year Founded: 2023

• Employee Count: 6

• Investors: Launchpad Venture Group, Boston Seed Capital, XFactor Ventures, and others.

• Amount Raised: $2M

• Business Model: $100 yearly membership with expansion opportunities in affiliate fees from brands, exclusive drops, and paid brand promotions​.

• Early Traction: Signed 63 premium brands—including Jenni Kayne, Canada Goose, and FRAME denim—generated $117K ARR from 2,011 members, and delivered 80% higher Average Order Values for brands compared to other sales channels.

  

IN PARTNERSHIP WITH

• Fidelity Private Shares cap table platform is the all-in-one tool that will help founders prepare for their next round of funding.

• This platform gives founders access to seed stage capital, equity scenario modeling, and premier support to generate, execute & store legal documents.

• As a valued member of the Bulletpitch community, we’d like to personally share a 20% discount for the product.

• Plus, if you’re coming from another platform, Fidelity has offered up its top-tier team to help transfer all docs for a seamless transition.

Due Diligence

WHAT WE LIKE

• Market Opportunity: The $1.2 trillion retail e-commerce market is ripe for disruption, offering an untapped opportunity to connect premium brands struggling with costly customer acquisition to high-spending shoppers seeking personalized engagement.

• Customer Acquisition Challenges: CAKE addresses the growing inefficiency of traditional acquisition channels like digital ads and influencer marketing by offering brands a performance-based model that ensures ROI.

• Consumer Insights: By tracking every shopper’s purchases across the platform, CAKE provides brands with rich behavioral data for personalized marketing, precise targeting, and discovery optimization.

POTENTIAL RISKS

• Brand Dependence: CAKE’s success hinges on maintaining and expanding premium brand partnerships, requiring constant value delivery for both sides.

• Scalability of Membership Growth: Sustaining high organic acquisition rates while keeping CAC low will be critical for long-term success.

• Consumer Retention Risk: As novelty wanes, there is a risk that members may disengage or discontinue their membership if they perceive diminishing value or choose to bypass CAKE to engage directly with brands.

  

  Cartoon by Jesse

Founder Profile

• Ben Fischman, Chairman: Founder of Ruelala, Lids, M Gemini, and multiple other startups.

• Dave McLaughlin, CEO: 3x founder with two exits and previously SVP of Membership at WeWork Labs.

• Estelle Palandjian, Head of Community: Former VC at Boston Seed Capital .

Comps

• MILE: Backed by LVMH Luxury Ventures and others.

• YaySay: Backed by Lightspeed Venture Partners, Afore Capital, Habitat Partners, and others.

Cast Your Vote

Last Week Today

• The Results Are In: Airia, a software platform that analyzes and visualizes occupancy patterns in real-time, was highly favored in last week’s poll.

• Subscriber Feedback: “Their unique focus on applying intelligence to infrastructure is genius, I’d expect this company take over the analytics industry.”