Dublin-based online wine club WineSpark has been valued at €8 million in its latest fundraising round following €1.5 million investment by global wine makers.
The start-up sought investment from its customers and notable wine producers globally, including those from New Zealand, Portugal and France. In total, 77 investors participated with an average investment of €19,500
WineSpark founder Eamon FitzGerald said he went into the funding round feeling it would be a “tall order” to fill the €1.5 million round for about 18.5 per cent of the company, but said the interest from suppliers and customers in buying into the company has been “really encouraging”.
He said the decision not to opt for institutional investors was based on prior experience in the sector.
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“I wanted to make sure that whoever I brought on board as investors would be aligned with the business in the medium to long term,” he said, seeking to avoid pressure to “compromise on [WineSpark’s] qualities and values”.
The company similarly acquired its initial seed funding when its founder secured €300,000 from wine makers to establish the business, which now generates annual recurring revenues of €1 million.
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The company expects to increase its employee headcount from its current five people to about 15 over the next three years. It aims to achieve €50 million in turnover by 2030, driven by an imminent expansion into the UK market later this month.
Mr FitzGerald noted that the UK market is about 12 times larger than Ireland. Having previously acted as managing director of UK-based online wine retailer Naked Wines until 2019, he “knows the market well”.
“I scaled that business to £100 million (€114 million) and 250,000 subscribers, so I know what success looks like. We are aiming for half that sales growth in five years. That gives me the confidence that I’ve done it before and could do it again.
“Wine drinkers who care about quality are just as underserved [in the UK] as they are in Ireland, especially in today’s climate of rising living costs,” he said.
Mr FitzGerald also noted WineSpark’s “extremely efficient business model,” which has a small fixed cost base, allowing them to sell wine at a lower margin while still retaining a profit.
In addition to entering the UK market, the company has launched an artificial intelligence (AI) recommendation service to personalise customers’ wine choices based on their taste preferences and order history.
“Our model, together with an enhanced AI experience, will enable people to drink better wine for the same spend, or much better wine for less.”
Born out of a desire to reduce waste and drive cost efficiency, the company has also been running a pilot scheme that incentivises customers to return wine cases and packaging in exchange for store credit. Since launching the scheme last year, they have seen nearly two-thirds of their boxes returned, enabling them to reuse 35 tonnes of cardboard.
