A new online wine service plans to use its new funding to send out vintages in a non-pretentious way, as Club W has raised $3.1 million (€2.3 million) in a Series A round.
Club W uses an algorithm to provide customers with personalised wine recommendations based on their tastes and purchasing histories, said chief financial officer and co-founder Geoff McFarlane.
Chief marketing officer Ari Radetsky said Club W subscribers must order at least three wine bottles per month, spending a minimum of $39 (€29, not including shipping) at each interval. He said Club W sells bottles at two different price points: $13 and $19 (€10 and €14) for each individual bottle.
Club W’s most significant competitors are traditional wine clubs and Wine.com. Radetsky is critical of Wine.com, citing its impersonal user experience and “bloated wine jargon that doesn’t help people connect with wine”.
Co-founder and chief business development officer Mark Lynn believes Club W’s business model is superior to the competition because it showcases small-batch curators who produce the artisan-crafted wine favoured by a growing share of the consumer market.
A recently authored Forrester Research Report estimates that the domestic wine industry generated $35.9 billion (€26.7 billion) in 2012.
Club W was founded by chief executive Xander Oxman, Lynn, and Mcfarlane in Denver in February last year. The company later relocated to Los Angeles and shifted its business development operations to startup accelerator Amplify LA’s Venice Beach campus, said Radetsky.
He also said Club W plans to spend the bulk of its funding on customer acquisition and increasing brand awareness.
McFarlane emphasised that Club W’s marketing efforts will focus on the 25- to 35-year-old demographic.
Crosscut Ventures led Club W’s Series A, with participation from Guild Capital, LA-based Siemer Ventures, 500 Startups, Brenner International Group, Amplify LA and angel investor Csaba Konkoly.
Club W has raised $3.6 million in all and has sold over 100,000 bottles of wine, said Lynn.