2025-01-27
CAKE
cakemembers.comHeadquarters
Boston and New York
Employee Count
6
Year Founded
2023
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, generated $117K ARR from 2,011 members, and delivered 80% higher AOV for brands compared to other sales channels.
Investors
Launchpad Venture Group, Boston Seed Capital, XFactor Ventures, and others.
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.
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.
Bulleted Version
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.
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.
MILE: Backed by LVMH Luxury Ventures and others.
YaySay: Backed by Lightspeed Venture Partners, Afore Capital, Habitat Partners, and others.
WhyCAKE
By creating a platform where brands can efficiently acquire customers while shoppers enjoy sweet perks, CAKE is well positioned to eventually expand beyond the fashion industry.
*Nothing in this content constitutes investment or legal advice. Conduct independent diligence and consult professional advisers before making investment decisions.*
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