Crave, a San Francisco startup that creates upscale, tech-savvy sex toys, announced that it has closed a $2.4 million Series A investment from over 60 angel investors, many of whom it reached through AngelList. The company will use the funding to increase inventory, expand its product line and find new retail channels.
Co-founder and CEO Michael Topolovac raised funds from venture capital firms for his previous two startups, including a total of $35 million for product lifecycle management software maker Arena Solutions, but says he wanted to reach a wider pool of investors for Crave. The decision to use AngelList was fueled in part by Crave’s positive experience with crowdfunding. In 2011, the production of its first vibrator, the Duet, was funded with $100,000 raised from about 900 donors through CKIE, a crowdfunding site run by Yanko Design, an online magazine about industrial design. Having a large network of investors helps Crave overcome the stigma of the sex toy industry and reach a mainstream audience.
“AngelList was part of our strategy because we wanted to get back to crowdfunding,” says Topolovac. “We had a lot of donors who were very supportive and we wanted to get similar leverage and impact on a financing level.”
The Duet is still the company’s flagship product and features a discreet design with a silicone vibrating tip, luxe details such as 24-karat gold plating on some models and a USB charger and memory drive with up to 16GB in storage. Crave’s second product line is called “Foreplay Jewelry” and includes stainless steel pendants that double as vibrators and a leather cuff that can be turned into handcuffs.
Crave’s design philosophy is creating sex toys that are discreet without being apologetic, which Topolovac says has helped it reach consumers who shy away from traditional vibrators. The company choses its distributors carefully. Its largest retail outlet is Fab.com, where Crave’s sleek vibrators fit in with other upscale lifestyle products. Other sellers include Good Vibrations and Babeland, shops that promote a female-friendly and sex-positive atmosphere. Crave, which designs and makes its products at it San Franciso headquarters, will use part of its Series A funding to find more distribution channels.