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The monthly subscription service provides parents with a stress-free way to purchase products tailored for their baby.

123 Baby Box raises oversubscribed round of $1.2 million

April 12, 2023 • By The UCI Paul Merage School of Business

When Zarina Bahadur was at a grocery store a few years ago, she noticed that a mother had her hands full trying to purchase a cart filled with baby products while managing a toddler and a crying infant.

She thought to herself, “Why can’t all these products come conveniently packaged in a box? Something that’s curated and convenient.”

Although she was earning her Master’s degree from UC Irvine at the time, Bahadur decided to start 123 Baby Box, a monthly subscription service for babies with products tailored to the baby’s age and developmental stage.

It wasn’t easy being a full-time student and running a business, but Bahadur persevered and packed boxes at night in her parent’s garage. The effort paid off towards the end of the school year when she won a $25,000 grand prize at the 2020 New Venture Competition.

Bahadur had 2 job offers after graduation but didn’t take them. “I decided that I’m not going to get a corporate job after graduation, I’m just going to risk it and start my company,” she said.

Since officially launching the company in March 2021, Bahadur has expanded her staff, grown revenue, and forged partnerships with renowned businesses in the baby product industry. She also went on to earn her master’s degree from the Merage School while claiming first place in five national pitch competitions. The company has also been featured in Forbes, Business Insider, Buzzfeed, and Nasdaq.

Most notably, the company recently announced that it received $1.2 million of funding from XRC Ventures, Sunstone Fund, Salt Lake City Angels, and Crescent Fund. Reputable individuals also contributed, including Mark Friedman, former VP of E-commerce at Steve Madden; Demos Parneros, former CEO of Barnes and Nobles; Sanjay Malhotra, former CEO of Emaar India; and Naren Parihar, Senior Director of Engineering at GoDaddy.

“Only 1.9% of venture capital goes to women, and even less goes to women of color, which is crazy,” Bahadur said, pointing out that she is from the Middle East. “So I'm very proud of this accomplishment.”

The startup has grown 245% over the last year, quadrupled its revenue, and has an average 14% monthly growth rate. Recently, the company signed a deal with one of the largest breast pump distributors in the country to send boxes to one million customers. It also works with big names like Fisher Price, Mattel, Nuby, and Goddess Garden.

Bahadur believes the company is resonating with people because it saves parents time and money that they would otherwise be spending trying to find the right products for their child.

“Especially for first time parents, they go through this journey of figuring out what kind of products they need,” she said. “We’re able to bring them everything that their baby needs in a curated monthly box every single month. So they don’t have to worry about what kind of developmental milestones their baby should be meeting and whether they are doing everything right. We have guidelines and resources that outline the developmental milestones and why these products are good for those types of milestones.”

Bahadur has a lot of faith in her company’s future. The business has demonstrated that it is fortified against an ailing economy as it has continued to grow despite high inflation and a decline in consumer spending. Like health care, the baby product industry is recession proof.

“The baby industry is an evergreen niche,” she said. “This isn’t a trend like CBD, Crypto, or NFTs.”

Bahadur is aiming to eventually grow 123 Baby Box into a more encompassing baby company to offer a more variety of items.

But the first step in growing the business is to gain more subscribers. To help with that effort, Bahadur will be devoting the $1.2 million in funds toward sales, marketing, inventory, general and administrative expenses, and development of the company’s own line of products.

“I really see us becoming this expansive baby company,” she said. “That way we can provide parents with all that they need beyond the subscription box.”