Preheat your oven to 350°F (175°C). Grease two 8-inch round cake pans and line the bottoms with parchment paper for easy removal.
In a large mixing bowl, sift together the flour, sugar, baking powder, and salt. Stir in the rainbow sprinkles to distribute evenly.
In another bowl, whisk together the non-dairy milk, vegetable oil, applesauce, apple cider vinegar, and vanilla extract until well combined.
Pour the wet ingredients into the dry ingredients and mix until just combined, being careful not to overmix.
Divide the batter evenly between the two prepared cake pans, using a spatula to smooth the tops.
Bake for 25-30 minutes, or until a toothpick inserted into the center comes out clean.
Let the cakes cool in the pans for about 10 minutes, then transfer to a wire rack to cool completely.
For the Vegan Buttercream Frosting:
Using a hand mixer or a stand mixer with the paddle attachment, beat the vegan butter until creamy.
Gradually add the powdered sugar, 1 cup at a time, beating well after each addition.
Add the vanilla extract and 2 tablespoons of non-dairy milk. Beat for an additional 3-5 minutes or until the frosting is light and fluffy. If the frosting is too thick, add more non-dairy milk, one tablespoon at a time, until reaching the desired consistency.
Once the cakes are completely cool, place one layer on a serving plate or cake stand.
Spread a layer of frosting on the top of the first cake layer, then place the second cake layer on top.
Frost the top and sides of the cake with the remaining buttercream frosting, smoothing it out with a knife or spatula.
Decorate the top with additional rainbow sprinkles to match the Funfetti theme.
Chill the cake in the refrigerator for at least 30 minutes before slicing to allow the frosting to set.