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The Los Angeles-based company expects the 5 million shares up for grabs to be priced between $14 and $16 each, targeting a $263 million valuation, Reuters reports.
What it does
Winc was founded by Brian Smith, Geoff McFarlane, Mark Thomas Lynn and Xander Oxman in 2011 when it was known as Club W. The company rebranded in 2016 to Winc, the hip, direct-to-customer winery that sends its patrons vino monthly based on their personal tastes.
Customers start with a survey outlining what they already like to eat, from spices to fruit, and whether one’s taste buds lead them to Skittles or M&Ms. With that out of the way, Winc curates a box of wines to send to customers each month, but gives the wine-drinkers final say on which ones get mailed out.
Its introductory cost is four bottles for $29.95. Customers can then choose from recurring monthly memberships that offer credits they can exchange for wine.
As alcohol sales rose during the pandemic, so, too, did Winc’s sales. Online alcohol sales jumped 234 percent year over year in the early weeks of the pandemic, global data analytics company Nielsen Corp. reported in 2020. Months later, many Americans said they were imbibing 14 percent more often during the pandemic—some much more than that—according to a September 2020 report in the journal JAMA Network Open.
Meanwhile, Winc’s sales of cases of wine jumped 80 percent over the past two years, to more than 430,000 cases in 2020. Although revenue soared from almost $36.5 million in 2019 to $64.7 million in 2020, the company’s marketing budget also ballooned as it rolled out a slew of new wine brands. It ended last year with almost $7 million in losses, down from about $8 million in losses in 2019.
While the company says its growth is driven by its “data-driven brand strategy” and distribution network, officials acknowledged the influence the pandemic has had on its good fortune.
“Since March 2020, we have experienced a significant increase in [direct-to-consumer] demand due to changes to consumer behaviors resulting from the various stay-at-home and restaurant restriction orders and other restrictions placed on consumers throughout much of the United States in response to the COVID-19 pandemic,” notes Winc’s S-1, filed with the Securities and Exchange Commission on Oct. 13.
But company leaders insist the increased demand is not just a fluke. “Industry research and steady consumer demand lead management to believe that this is a permanent shift in consumer behavior,” they assure in the filing.
The investor with the most to gain from the IPO is San Francisco-based Bessemer Venture Partners, which owns 1,633,903 shares, or 14.4 percent, before the offering. Bessemer led Winc’s Series A and B funding rounds in 2014 and 2016, respectively, per Crunchbase.
Tokyo-based Cool Japan Fund, which led Winc’s $10 million Series C round in 2019, owns 1,026,198 shares, or 9 percent. Meanwhile, Shining Capital owns 1,008,159 shares, or 8.8 percent ahead of the IPO. The Hong Kong-based investor led the startup’s 2016 Series B round alongside Bessemer.
BofA Securities and Canaccord Genuity are jointly underwriting the proposed offering as lead book-running managers. Craig-Hallum and Roth Capital Partners are also acting as book-running managers. The Benchmark Co. is acting as co-manager.
The growing digital wine club will trade on the NYSE under the symbol WBEV.
Illustration: Dom Guzman
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