Anaheim Hills’ 1-800-WEDDING has received a third-round injection worth $10.4 million from several groups of investors, including a few based in the so-called “wedding capital of the world,” Las Vegas.
The funding is enough to propel the online 1800wedding.com and offline wedding-consulting business further into the $45 billion wedding industry. It already serves Dallas, Houston and Southern California, is breaking into the Atlanta, Denver, Chicago and Detroit markets this month, and intends to be in major cities coast-to-coast by year-end.
But profits won’t come for awhile, as the company continues to pour on the money. In addition to a $6 million advertising and promotion budget, “we spend a lot of money on technology,” said Donne Kerestic, founder and president.
The dot-com is revamping its wedding site, and expects to launch the new version in about a month. Some of the enhancements: Vendors affiliated with the site,currently 700,will be able to create and update their own web sites easily and soon will be able to sell directly from those sites. And for the brides, instead of a typical chat room it will offer “voice over IP,” meaning users will be able to talk through the computer to one of the company’s wedding consultants. It is also adding localized editorial content to the site.
Meanwhile, 1-800-Wedding is planning to beef up its staff from the current 115 to 200 by year-end. It now outsources development, but will take that in-house in July.
“We’re more like a Ticketmaster CitySearch model,” Kerestic said. CitySearch sites,filled with local content and local sponsors,drive business to Ticketmaster and local sponsors.
1800wedding.com has two client bases, the brides and grooms and the local businesses, Kerestic said.
The site has no banner ads, but local mom-and-pop wedding-related businesses (the wedding industry is mostly composed of small businesses) pay $200 to $400 per month to be the an online vendor. The fee includes a vendor web site and tracking reports. There are 35 business categories, such as photography, disc jockeys and catering.
Kerestic says the vendors are solicited and screened by sales people, and further, are reviewed by brides for satisfactory results and given a certification similar to the Good Housekeeping seal of approval. It’s called “5-Bride Certified.”
“In the wedding space, it’s all word of mouth,” Kerestic said, so it’s important his vendors be reputable.
When a bride visits the site, she registers and the system generates three vendor referrals in her city from each category she chooses, Kerestic said. The referrals are rotated among affiliated businesses.
Kerestic sees the business evolving into a “newlywed model.”
“Newlyweds are the biggest buying force in the country,” he said, noting that just-married couples often need mortgage loans, car insurance and new apartments.
Formerly the head photographer for an OC studio specializing in sports photography, Kerestic bought a wedding photography company, which eventually led him to the Internet.
Even though he didn’t have a technical background, he was the company’s CTO up until a month ago.
“When you like something, you just do it,” he said.
The company received its first round of funding, worth $1.6 million, in 1998 from the OC-based Tech Coast Angels. Its second round of $2 million came from a few venture capital groups including Wasatch Venture Fund, an affiliate of Silicon Valley-based Draper Fisher Jurvetson, along with Mercury Partners and E*Capital, both in Los Angeles.
Flynn & Gallagher Investments, based in Las Vegas, led the third round. Maurice Gallagher, principal, is chairman and a founder of MGC Communications (Mpower Communications Corp.), a Las Vegas-based telco, which went public in 1998.
Other ties to Las Vegas include an investment from Jefferies & Company, a venture-capital investor in companies such as Las Vegas-based PurchasePro, which went public last year.
PurchasePro is a B2B site where system vendors bid on and purchase goods and services from one another. 1800wedding.com will use the PurchasePro system for its e-commerce sites and create a PurchasePro wedding network, Kerestic said. With the software, consumers are able to use one shopping cart and pay once for products selected from a variety of vendors.
Soon, Kerestic said, 1800wedding.com will be integrated with a major online wedding retailer and have the capability to book hotels online for the honeymoon. n
