Bake cakes and let them cool completely.
While the cakes are cooling, prepare the frosting.
Place one cake on a serving plate.
Spread frosting on top.
Place the other cake on top and gently press it to secure into place.
Spread frosting all over the cake smoothly.
Place this plate of iced cake in a large, deep baking dish.
Cover the cake in sprinkles. Do the sides first and then, do the top. All the excess sprinkles will fall in the tray and can be reused.
Keep decorated cake aside.
Roll out marshmallow fondant in different colors.
Use a pizza cutter to cut out thin, even strips of each color.
Place your first fondant strip on a sheet of wax paper.
Then, brush very little water at the edge of this strip.
Stick the next strip on this damp edge.
Brush water along the edge again and stick another strip.
Keep doing this until all your strips are stuck together. Keep aside.
Roll out some fondant in any color you want (I used dark blue).The length of this piece should be about the same as the length of your strips.
Brush some water on top of this piece.
Gently pick up your strips arrangement and place them on top of this dark blue piece until it sticks into place.
Use a pizza cutter to cut out the irregular ends.
Use both your hands to gently curve this entire rainbow strip until it looks like an upside down "u"
Use a pizza cutter to cut the bottoms so they are straight.
To make clouds, roll out some light blue fondant and use a flower cutter to cut out two flower shapes. Then, use a knife to cut these flowers in half.
Brush some water on both ends of the rainbow strip and stick the clouds in place.
Allow this rainbow to dry for 24 hours or until it gets hard.
Once this rainbow is dry, flip it over and use some melted chocolate to stick toothpicks on both ends.
Push the rainbow into your cake. Enjoy!