Party City, the party goods supplier and retail chain, has taken a minority stake in digital invitations platform Punchbowl, the companies announced today. The deal sees Punchbowl’s technology now being used to power an online invitation platform on Party City’s e-commerce site, opening up Punchbowl to an influx of new customers.
While the official announcement didn’t disclose the size of the round, an SEC filing listing Party City Retail Group president Ryan Vero points to an infusion of an additional $4 million. Vero has also joined the board as a result of the deal, meaning Party City will be working more closely with Punchbowl going forward.
According to Punchbowl CEO Matt Douglas, Party City’s investment and commercial partnership was only one of the options on the table for his company.
Starting in mid-2016, Punchbowl began to see a lot of inbound interest, leading to what he described as “several alternatives” that the company could have pursued. But Douglas, not looking to sell, saw the potential in working with the large party supply retailer as a means of growing Punchbowl’s own business.
Party City sees around $2.3 billion in annual revenue and operates some 900 retail locations – which is how most consumers know of the business today. But Party City is also a vertically-integrated company, meaning they’re often the manufacturer of party goods sold in other party stores, too. Meanwhile, its e-commerce business accounts for around 10 percent of the company’s retail revenue today.
Punchbowl, on the other hand, never focused on physical goods. Founded in early 2007, the service is one of the early competitors in the digital invites and e-cards space, and a rival to others like Evite.
The company, which now sees tens of millions of customers per year, had bet on the demise of paper cards for things like party invitations and greeting cards. It translated the paper card format to digital – including with virtual envelopes that…