Wine marketplace Vivino raised $155 million to expand into new countries, add staff and build out its wine-recommendation engine after more than doubling wine sales during the pandemic.
Wine sales on Vivino’s platform more than doubled in 2020 to $265 million as consumers shut out of bars and restaurants bought bottles online to drink at home. That drove the San Francisco-based company—which suggests wine based on price, pairings or region and lets users buy it on its app—to its first break-even annual performance.
The money will allow Vivino, which already operates in 17 countries and has 50 million users, to expand into new markets, including Mexico, Japan, Portugal and Poland, and grow staff by at least 50% to 300 people, CEO Heini Zachariassen said in an interview. The company will also continue developing a personalization feature that Zachariassen likens to a Netflix-like rating for wine.
The round, the company’s first since 2018, was led by Swedish investors Kinnevik AB, Vivino said. Sprints Capital, GP BullHound and Creandum. AB also invested in the round, which brings Vivino’s total funds raised to $221 million. Zachariassen said the firm’s valuation rose substantially, though he wouldn’t disclose figures.
Still, Vivino doesn’t anticipate being profitable this year or next, and the company isn’t planning an initial public offering just yet, Zachariassen said.
“Vivino has claimed the position as the go-to wine utility for consumers all over the world, creating a strong community with network effects and rich data insights,” Kinnevik’s CEO Georgi Ganev said in the statement.
Vivino began in 2010 with the vision of making it easy to find and enjoy wine you like, Jeff Gorham, manager of customer experience, tells Digital Commerce 360 in an interview in January 2021. Vivino was founded in Denmark, but now has its headquarters in San Francisco.
Initially, the app started as a way for consumers to scan a wine bottle label in the app, view ratings—a 1 to 5-star rating—and text reviews from consumers who previously tried the wine.
Consumers grew incrementally over time. And in December 2019, it celebrated 1 billion bottle scans, Gorham says. Today, roughly a year later, it has nearly 1.5 billion wine scans, showcasing how popular Vivino became in 2020, Gorham says. Today, 50 million consumers have used the app.
For the first five years of operation, Vivino didn’t earn any money and was merely just buildings its wine rating database. In 2015, Vivino launched its marketplace. Today, that includes 700 independent wine businesses, such as wineries, from 14 different countries with plans to expand with the new funding.
Within the app, consumers have a personal digital “cellar” where they can save wines they like for easy reference later. Shoppers can also scan a bottle they might have at home, and the app enables shoppers to know where they can buy it or if it is available to purchase in the app. Because the foundation of Vivino is based on consumer tracking and rating the wine they like, Vivino has rich customer information about their preferences and can provide personalized recommendations.
Similar to the Amazon.com Inc. marketplace, Vivino also owns some of its own wine inventory that it sells and ships directly to customers. Globally the breakdown of sales between the marketplace and its own sales is about 50-50, says LaNae Rueda, vice president of global customer experience.
Vivino isn’t the only online wine merchant that grew sales during 2020. Total U.S. online wine sales—by sellers of all kinds, including wineries, restaurants and retailers—grew 233% to about $2 billion in 2020 from about $600 million in 2019, according to the latest annual U.S. wine industry report from Silicon Valley Bank. U.S. online sales now represent about 3% of the U.S. wine market, up from 1% in 2019, according to the report.Favorite