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Hello Cake, a sexual wellness brand, raised $18 million to expand to more retailers and fuel its M&A, co-founders Hunter Morris and Mitch Orkis tell Axios exclusively.

Why it matters: Investment activity in the sexual wellness category has grown alongside the broader rise in beauty, health and wellness.

Zoom in: The Series B round was co-led by Silas Capital and Strand Equity, with participation from AF Ventures.

Hello Cake also acquired personal lubricants maker Trigg Laboratories — owner of the Wet and Turn On brands — funded with Series B proceeds and existing cash, Morris says.  

The profitable company has raised $36 million to date.

How it works: Los Angeles-based Hello Cake makes condoms, lubricants, toys and supplements, designed with bright and colorful packaging at affordable price points.

Its products can be found at Target, Walmart, CVS, Walgreens, Rite Aid and Amazon.

What's next: Hello Cake is looking for acquisitions to help it expand into personal care that tie into sexual hygiene, Morris says.

What they're saying: "There hasn't been a loud yet approachable yet fun brand built in the category in a long time," Silas Capital partner Brian Thorne tells Axios.

It brings a new consumer to the aisle, he says, adding that he's excited about the wholesale traction it already has.

The latest: Its acquisition of Las Vegas-based Trigg brings some U.S. manufacturing capabilities in-house, letting Hello Cake own its formulas and IP, make its own SKUs and take products to market faster.

Hello Cake will continue Trigg's white-label and private-label services.

"What we can add to the equation is the marketing and sales relationships that we've built as a trusted partner with [food, drug and mass retailers]," Orkis says.

Hello Cake plans to add new equipment to the Trigg facility that will allow it to manufacture more products, as well as boost hiring for product development and operations, Morris says.

Hello Cake raises $18M for M&A

Illustration of a pillow in the shape of a hundred dollar bill on a bedspread

Blackstone and TPG are prepping a joint takeover bid for Bausch + Lomb (NYSE: BLCO), a Bridgewater, New Jersey-based supplier of contact lenses and eye care products, per the FT.

Why it's the BFD: This could be one of the year's largest buyouts, with a likely value of between $13 billion and $14 billion, and it probably should have happened several years ago. 

Blackstone and TPG had expressed interest in Bausch + Lomb before its debt-laden parent company, Bausch Health (NYSE: BHC), opted for an IPO in May 2022.

The IPO priced low, and shares never reached the proposed range until the new FT report.

Behind the scenes: This also would be another huge M&A win for Bausch + Lomb CEO Brent Saunders, who sold Allergan to AbbVie for $63 billion just four years ago. He had been the eyecare company's CEO from 2010 to 2014 before reclaiming the reins in early 2023. 

The bottom line: There had been early talk of a spinoff, rather than a sale, but Bausch Health lenders had objected.

PE firms team up to buy Bausch + Lomb 

Illustration of an eye chart with dollar signs instead of letters.

Blue Stripes, which makes consumer products from cacao fruit, raised a $20 million Series B, CEO Oded Brenner tells Axios exclusively.

Why it matters: Scientists, startups and conglomerates are finding new ways to use the entire cacao fruit, rather than just the beans, reducing waste.

About 75% of the cacao fruit is discarded after the cocoa beans are harvested.

Zoom in: The round was led by Zintinus and included The Hershey Company and Whole Foods Market, Brenner says.

DMG Ventures, Hamilton Lane and Praesidium also invested.

Behind the scenes: It took Blue Stripes, which initially aimed to raise $40 million, over a year to complete the round, the CEO says.

A difficult fundraising environment meant that the startup had to demonstrate the potential to generate healthy margins at an early stage, he says.

The amount raised will sustain the company for the next three years, Brenner says.

To date, the company has raised a total of $40 million, he adds.

Flashback: Brenner previously founded chocolate emporium Max Brenner, a venture that culminated in a sale to — and non-compete lawsuit with — Israeli food conglomerate Strauss Group. 

Brenner co-founded Blue Stripes in 2018 with Aviv Schwietzer. The executive says he initially wanted to start another chain based on chocolate, but quick-serve and tied to healthy products like cacao water.

But after the pandemic hit, he pivoted to consumer products and launched in Whole Foods in 2022.

How it works: The company has 16 different SKUs, including cacao water, chocolate bars, granola, trail mix, dried cacao fruit and chocolate-covered cacao beans.

What's next: The biggest challenge for Blue Stripes is educating consumers on the benefits of cacao fruit.

Brenner aims to expand into natural retail channels and food service, such as airports, chains, hotels and cafes.

The company is also looking into uses in baking with flour made from the cacao shell.

Cacao fruit startup Blue Stripes raises $20M 

Photo: Ferley Ospina/Bloomberg via Getty Images

💸Frasers Group (LSE: FRAS) upped its takeover bid for British handbag maker Mulberry (LSE: MUL) to £111m, after its initial £83m offer was rejected.

Mulberry's majority shareholder, Challice, which has a 56.4% stake in the retailer, has rejected Frasers' sweetened offer, saying it had no interest in selling its shares to the British sports and apparel group.

❌ Walgreens Boots Alliance plans to close about 1,200 stores, representing nearly 10% of its locations worldwide.

All of the closures will occur in the U.S., spokesperson Jim Cohn tells Axios, with about 500 occurring by about the end of August 2025. The company has about 12,500 locations in the U.S., Europe and Latin America.

CEO Tim Wentworth says he's trying to right the ship as the company continues to struggle with soft retail sales, labor crunches and low drug reimbursement rates.

👀 The FTC has unanimously approved major changes to the pre-merger filing process, albeit fewer changes than originally proposed.

Parties will be required to provide new information on supply relationships and overlapping customer relationships, translate foreign language documents, provide documentation from the supervisory team lead, and more information on ownership structures (including private equity).

The FTC also will allow the return of early termination requests after having "temporarily" suspended them for past three-plus years.

Retail therapy

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Want more retail deals? Go deeper into our full database in the Axios Pro Deals Tracker.

⚽ Toca Football, aiming to be a Topgolf for soccer, raised around $100m from individuals such as Jim Kavanaugh and Harry Kane. Go deeper

• Ghost, a B2B retail inventory marketplace, raised $40m in Series C funding, per Fortune. L Catterton led, with participation from USV, Cathay Innovation, Equal Ventures and Eniac Ventures. Go deeper

• Bosideng, a Chinese down coat maker and retailer, made a minority investment in Canadian outerwear brand Moose Knuckles, which is controlled by Cathay Capital. Go deeper

• Tengram Capital Partners sold hair care and skin cleansing business HRB (formerly High Ridge Brands) to Sodalis Group, a European beauty and personal care platform. Go deeper

• GHP Group, a outdoor living and indoor heating products company, was acquired by Turnspire Capital Partners. Go deeper

• Filippo De Laurentiis, an Italian knitwear maker, sold a majority stake to Made in Italy Fund, a private equity entity managed by Quadrivio & Pambianco. Go deeper

• InPost (Ams: INPST) is in advanced talks to acquire the 70% stake it doesn't hold in British logistics firm Menzies, per Sky News. It bought an initial 30% position last year for £49m. Go deeper

🎣 K&E Tackle, a fishing brand, was acquired by GSM Outdoors. Go deeper

• Voggt, a European live-shopping platform, was acquired by Fanatics. Go deeper

• Frasers has acquired a significant non-controlling stake in Africa-focused sport and fashion retailer and distributor, Hudson Malta. Go deeper

• Europastry, the Spanish frozen bakery producer, has canceled its market debut, citing market instability as a factor. It will continue to evaluate going public when the market situation gets better. Go deeper

• Rappi, a Latin American fast-delivery startup, is prepping an IPO for next year, per Bloomberg. Go deeper

• Al Majed for Oud, a Saudi Arabian perfume maker, made its market debut on the Saudi stock exchange, with shares up 122.2 riyals, or 30% from the offer price of 94 riyals a share. Go deeper

• True Value, a Chicago home improvement retailer and wholesaler backed by Acon Investments, filed for Chapter 11 bankruptcy protection, and received a stalking horse bid from Indiana's Do It Best Corp. Go deeper

• Moschino, a fashion brand backed by Italian fashion group Aeffe, has sold its beauty brand rights, including its cosmetics and perfumes, to EuroItalia for €98m. Go deeper

• Y/Project, the fashion brand, is seeking a buyer after being placed into receivership earlier this year. Go deeper

• Morrisons, the UK grocer, is working with Goldman Sachs and HSBC to refinance £1.2b in leveraged loans. Go deeper

Retail transactions

• Citigroup promoted John Chirico to co-head of corporate banking, named EMEA investment banking chief Jens Welter as head of North American investment banking, and put Nacho Gutiérrez in Welter's former job, per Bloomberg. Go deeper

• Kevin Flaherty, previously the SVP of digital marketing and off-premises at MOD Pizza, was named CMO of Taco John's. Go deeper

• Jacqueline Hawthorne-Robinson, a sibling of founder Lowell F. Hawthorne, was named chair and CEO of Jamaican patty chain Golden Krust while Glen Fancie was named CFO. Go deeper 

It's Personnel

📺 What we're watching: Kim started "The Bear" on Hulu.

✏️ Big thanks to newsletter editor Claire Rychlewski and copy editor Jay Bennett for today's edits.

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1 big thing: Hello Cake raises $18M for M&A

2. The BFD: PE firms team up to buy Bausch + Lomb

3. Cacao fruit startup Blue Stripes raises $20M

4. Retail therapy

5. Retail transactions

6. It's Personnel

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October 15, 2024

1 big thing: Hello Cake raises $18M for M&A