Charlottesville-based online wedding marketplace Borrowed and Blue recently closed a Series A fundraising round that company officials hope will propel the business past its competition.
The 22-employee firm, headquartered on Market Street, raised $7 million in a campaign that ended in October, company co-founder and CEO Adam Healey said. The fundraising effort was led by Boulder, Colorado, venture capital firm Foundry Group.
The money, Healey said, will allow Borrowed and Blue to have couples and vendors do business through its website, which is a first in the wedding industry. Currently, the site helps couples plan weddings, gather ideas and find vendors and pricing.
The company recently debuted the first version of its transaction platform. The latest investment will be used to add features to and perfect that system, Healey said.
Healey started the firm five years ago with his wife, Christen, after selling his hotel search engine Hotelicopter and planning his own wedding.
“The travel industry is pretty efficient, it is pretty transparent around pricing information and availability,” he said. “The wedding industry is the opposite. It is pretty opaque. People don’t know what things cost or what is available.”
The Healeys originally funded the company themselves, reaching profitability within three years. Last year, the company raised $2.5 million in seed money, its first effort to court investors.
The U.S. wedding industry was worth $55 billion in 2015, according to a report from business intelligence group IBIS World.
Jason Mendelson, Foundry Group managing director and now a board member of Borrowed and Blue, said he expects the company to grab a big share of that market.
“I am a very patient investor, and I am certainly in no hurry … But if we do everything right, I would like to become the website that is most trusted by brides and grooms as just the place to go,” he said.
Mendelson said he was attracted to the company because it is aiming to create a product that does not currently exist and it is customer-focused.
“It was very easy to see that the incumbents out there haven’t innovated in a couple of years,” he said. “It was also obvious that the incumbents out there are focused on everybody but the couple.”
Borrowed and Blue is Healey’s third web-based startup, after Samba Digital Media, founded in 1999, and Hotelicopter, which was sold in 2011 to online hotel marketplace Room Key for an undisclosed sum.
That experience, and the goal to become the only wedding marketplace of its kind, helped Borrowed and Blue pull in Foundry Group and Cambridge, Massachusetts-based early-stage investment firm Accomplice.
“For me, it boils down to three simple points. One, I like Adam, I feel like he is a natural-born entrepreneur, and it’s a label I give to a select few individuals,” said Accomplice venture partner TJ Mahony.
“Two, they took an approach to the market where content came first. The third is that the wedding industry is massive, and everybody who has gotten married knows there has to be a better way.”
Mahony, who started and sold Flip Key, a vacation rental marketplace now owned by TripAdvisor, said he sees the potential for a billion-dollar company with Borrowed and Blue.
“When you look at a marketplace, if you can be No. 1, you can end up being fairly valued at anywhere between 5 [percent] to 10 percent of that industry,” he said. “So, I think there is a very good 10-figure potential here.”