I recently found myself wandering the aisles of a wine store.
My wife had given me instructions (“Pick up some red wine for dinner with my dad”), but no details.
So I considered a Pinot Noir, a Malbec, and a Merlot.
I examined some fancy labels in the French, Italian, and Californian sections.
And I picked through the shelves for “Big,” “Medium,” and even “Natural.”
I still had no idea what to get. After ten minutes, I gave up and bought a bottle of Scotch.
Why does buying wine have to be so hard?
Today, I’ll tell you about a startup that’s aiming to solve this problem…
And then I’ll reveal how you could potentially make 10x your money by investing in it.
A $220 Billion Industry
Wine is big business.
Globally, the market is worth $220 billion.
Baby boomers make up the majority of buyers. But according to Silicon Valley Bank's "State of the Wine Industry Report 2019," the boomers will soon be replaced by Millennials.
At 73 million strong, Millennials are the largest consumer group in the market — and there are certain attributes in a service that they value most:
Convenience. Customization. Experience.
And as it turns out, these are the attributes being offered by a startup called Winc…
Winc is a wine club that makes it easy to buy and enjoy wine.
Here’s how it works:
- You answer some questions on Winc.com to help the company figure out what you like. For example, it will ask how you take your coffee. Strong and black? Milk and sugar? Frappuccino’ed?
- Winc sends you a few bottles of wine that should suit you. Since it creates and curates over a hundred high-quality wines, it has plenty to choose from.
- After you try a bottle, you rate it — that’s how Winc zeroes in on exactly what you like.
Then, each month, it ships you a bunch of new bottles.
The monthly charge is $49.95 — about $12.50 per bottle — and if you don’t need more wine at the moment, just skip a month and you won’t be charged.
Winc appears to have tapped into something:
Its 500,000 customers have bought 13 million bottles of wine, and have left 3.3 million ratings.
In 2018, its revenues reached $40 million, up from $36 million the year before.
Fast Company named it one of the 50 Most Innovative Companies.
Business Insider said: “The best wine club overall…Fantastic wine selection, reasonable prices, fast delivery, thorough tasting notes.”
Perhaps this helps explain why professional investors including Bessemer Venture Partners and 500 Startups have already poured nearly $50 million into this young company.
And now you can invest right alongside them…
You see, Winc is currently raising up to $15 million from investors like you.
Should you invest? Let’s look at some of the pros and cons.
On the “pro” side:
- Its approach makes it easy to buy wine. Millennials love it.
- Its business model enables real-time product testing, validation, and brand building. In the wine business, such tools are invaluable.
- Its revenues, growth rate, and existing investors help reduce our risk.
On the con side, however, its valuation is steep — $110 million — and so is the minimum investment of $999.
We aim to earn 10x on any of our private investments. To reach that goal, Winc would need to be acquired or go public in the future at a valuation of at least $1.1 billion.
Is that possible?
Get Drunk (and Rich) on $12 Wine
There’s been significant M&A activity in the spirits business lately, including Patron Tequila being acquired for $5.1 billion, and Lagunitas beer being bought for $1 billion.
On average, the sales multiples in this sector are about 7x or 8x. So for Winc to be acquired for about $1.1 billion, its revenue would need to reach ~$125 million.
Do you think Winc could triple its annual revenues, from $40 million to about $125 million?
If so, perhaps you should dig into this investment opportunity more deeply.
You can learn more here »
Please note: Crowdability has no relationship with any of the companies or platforms we write about. Crowdability is an independent provider of education and research on startups and alternative investments