Adult toys have become big business. Recent studies show that the industry is worth US$15 billion and that the figure could reach US$52 billion by 2020. But, what exactly has changed?
Well, the adult toy industry has been the one of the fastest growing industries in the past decade. Key growth drivers in the sector include widespread changes in cultural values and anonymity of the internet. When the toys could only be found in retail stores, not many people would dare to bother for fear of being seen. No one wants to be seen buying a sex toy at a retail shop. However, the internet has made the whole process much easier. No one has to see you making the purchase. All you need to do is use your smartphone to make the order and the product will be delivered to your doorstep wrapped in a package that leaves no clue at all.
Last year, Cave Inc., a San Francisco based startup that specializes in up-market toys raised more than $2.4 million from about 60 investors. According to Cave Inc. CEO Michael Topolovac, investors don’t care about the industry as long as they are guaranteed profits on their investment. They want results, and currently sex is one of the hottest markets. He says that the adult industry is proving to be a massive opportunity what investors can’t pass on.
Cave Inc. currently works with a group of innovative technologists to help manufacture better, more satisfying products. The company’s co-founder Ti Chang first met Topolovac in China where she was promoting her startup. The two merged their ideas to combine erotica with jewelry and the result was Cave Inc.
Another adult toy company, AHALife, owned by former Goldman Sachs analyst Shauna Mei managed to raise more than $21 million in 2010 to start the company. Minna Life, a San Francisco adult toy startup owned by Brian Krieger also rose close to $83.777 million around the same time. It shows just how much investors are willing to throw their money towards adult toys.
It is, however, important to note that banks and other traditional payment processors are still not very open to adult toy businesses. For instance, a bank may decline that you open an account with them completely just because you deal in adult toys. Fortunately, companies such as EMB are now providing all type of adult toy merchant accounts at very competitive prices.