Bold Xchange, a St. Louis startup focused on employee and event gifting, hopes to accelerate its growth after closing on a pre-seed funding round.
The startup raised $510,000 in its oversubscribed financing round, eclipsing its target of $500,000. Bold Xchange’s fresh funding comes as it says it has increased sales year over year amid a shift to a business-to-business sales approach.
Bold Xchange’s funding round includes a $100,000 non-dilutive grant recently awarded by local nonprofit Arch Grants, which provides equity-free grants to startups. The startup received the $100,000 through Arch Grants’ Growth Grants program, which gives follow-on funding to help previous winners of Arch Grants' annual startup contest expand locally. Bold Xchange initially won funding from Arch Grants in 2020, relocating its operations from Charlotte, North Carolina, to St. Louis.
Other investors in Bold Xchange’s pre-seed funding round include New York-based Savantus Ventures and MJR Venture. It also includes angel investors, such as local entrepreneurs Doug Villhard, academic director for entrepreneurship at Washington University’s Olin Business School, and SteadyMD co-founder and CEO Guy Friedman.
Bold Xchange provides corporate and group gifting through an online marketplace that sells items from Black-owned businesses. It initially began with a consumer focus, but has shifted to a business-to-business model focused on corporate gifting, with brands that include Centene Corp. (NYSE: CNC), Home Depot (NYSE: HD) and CarMax (NYSE: KMX) using its platform to buy gifts for employees and events. Bold Xchange, founded and led by husband-and-wife duo Doug Spencer and Danielle Deavens, says its customers have included more than a dozen Fortune 500 companies and several large U.S. law firms.
Deavens said Bold Xchange’s ability to raise funding was aided by more than a years’ worth of data showing that its shift to corporate gifting “was the right decision and that we are creating and developing a very compelling solution to a very real problem that has a massive market opportunity.” While Bold Xchange didn’t disclose specific revenue figures, Spencer said its revenue is currently in the six figures and is growing year over year, with expectation that it will at least double this year.
Deavens and Spencer noted their decision to raise funding comes as venture capital into startups has slowed considerably in recent quarters, down from record highs in 2020 and 2021. The pair said revenue growth was an important metric that resonated with investors, with Spencer adding that it’s important for startups in the current funding environment to show that people want to buy what companies are offering and that they're solving an important problem.
Spencer said Bold Xchange plans to use its funding to accelerate its growth further. The company said that will include possibly adding to its four-person team as its growth necessitates and also placing a focus on technology to enhance its online marketplace. The startup in recent days launched a new web app.
“That just demonstrates where we are headed, being able to lean even further into creating a really exciting solution that’s tailored to the needs of people managers and the team members they are gifting,” Deavens said.
Bold Xchange said its funding has already helped increase its sales, with its investors in the pre-seed funding round having helped it close deals. Aside from those connections, Spencer said the group of investors also bring significant “operator experience and wisdom.” He noted Villhard and Friedman have both sold companies of their own. Villhard was co-founder of St. Louis-based software firm Second Street Media, which sold in 2021 to a publicly traded firm headquartered in Texas. Friedman founded testing startup HigherNext, which was acquired in 2013.
