Phoebe’s Cupcakes eats up $1.5M from Ascent

April 10, 2009 | Camille Ricketts | Comments | |

Ascent Equity Capital has given $1.5 million to launch Phoebe’s Cupcakes, a bakeshop run by Chicagoans Phoebe Walters and Kate McNamara. Why would a firm with a portfolio of banking and legal startups fund a bakeshop? Apparently, general partner Chad Mollman is a huge fan of the duo’s mint chocolate chip cupcakes.

Such a fan, in fact, that the firm is backing what will eventually become a chain of stores in several cities, offering 200 flavors of the trendy dessert. Mollman told VentureWire that he probably bought 200 cupcakes a year from Walters and McNamara himself. Ascent plans to invest $50,000 to $100,000 in each shop.

While all the cupcakes are hand-made in small, individualized batches, Walters and McNamara don’t do all the baking themselves. They’ve enlisted a team of culinary school-trained cooks to grow the business. The plan is to offer the full menu for special events and to restaurants that might be interested in buying in bulk. There is also a mail-order delivery service in the works.

Ascent is a pretty small firm, managing a fund of about $5 million. A cupcake chain might seem unusual, but Mollman seems to have faith in his taste, telling VentureWire that with the potential for event catering and wholesale distribution, “There’s a lot of other opportunity there.”

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About the Author, Camille Ricketts

Camille is the lead writer for GreenBeat. She came to VentureBeat from Google where she worked on its traditional platforms team, particularly in TV. Before that, she was a reporter for the Wall Street Journal in New York and London. Follow her on Twitter at @camillericketts, and follow VentureBeat on Twitter at @venturebeat.

With GreenBeat 2009, VentureBeat's all-star conference on all things Smart Grid, coming up in November, Camille will be expanding coverage of this exciting space. Stay up to date by following @greenbeat2009 on Twitter or by becoming a fan of the event on Facebook here.

  • Joe S
    The cupcake trend has already peaked. Bad idea to just start investing in it at this time.
  • TedHoward
    Odd story for VentureBeat, though definitely within the realm of "venture stories." And I would say the cupcake market is saturated. I can think of multiple cupcake-only stores in Seattle, San Francisco, and Vancouver. I would sooner short the cupcake market than go long.
  • Heather
    Consumers will continue to buy cupcakes, especially when new, better shops come to town. Even in saturated markets. As with donuts, pizza or coffee. Some "trends" never peak.
  • I agree with those that invest in this industry is not profitable. However, should think about this coming out of the crisis.
  • I agree with those that invest in this industry is not profitable. However, should think about this coming out of the crisis.