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Digital Wine Ventures raises $6m to fund launch of a wine trade marketplace

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Digital Wine Ventures raises $6m to fund launch of a wine trade marketplace
Dean Taylor, CEO, Digital Wine Ventures

Digital Wine Ventures Limited (ASX:DW8) one of just three companies in the wine sector listed on the Australian Stock Exchange, has announced that it is raising capital to fund the expansion of its WINEDEPOT business.

In total the company expects to raise up to A$6.15m through the issue of 246 million new shares at 2.5 cents via a strongly supported private share placement including director participation followed by a share purchase plan offered to existing investors.

Funds raised will be applied to accelerate WINEDEPOT’s growth strategy through the launch of its Direct-to-Trade Marketplace and expansion of its Smart Logistics Solution.

Investments will be made in technology and development, sales and operational resources, advertising and marketing and general working capital.

When launched later this year, WINEDEPOT’s Direct-to-Trade Marketplace will allow restaurants, hotels, bars and bottle shops to support wine producers by purchasing directly from them via a farm-to-table inspired ordering solution.

What spurred this idea?

Traditionally Australia’s $5.3 billion wholesale liquor market has been serviced via distributors who charge on average between 35 and 50% of the wholesale price, leaving very little profit for the producer.

WINEDEPOT’s Marketplace will provide Australian and international producers the ability to service this market for a fraction of this cost, encouraging them to share some of the margin that is saved with the trade buyers by offering discounts for loyalty and early payment.

With a global pandemic forcing millions of businesses globally to re-imagine their core operations and adapt to a new normal, Digital Wine Ventures CEO Dean Taylor (named one of the 50 Stars of Wine and TOP 50 People in Ecommerce) believes his 8th start up in the wine and technology sector couldn’t have been launched at a better time.

“COVID-19 has driven millions of consumers online across almost every product category, but in particular wine.

Having discovered how convenient buying this way is, I doubt many will revert to their previous purchasing habits. This is not just consumers but businesses too.”

“Our Direct-to-Trade Marketplace will provide wine and other beverage producers a simple, cost-effective and highly scalable platform to reach and transact with thousands of trade buyers.

Similar to direct-to-consumer sales channels it is a far more profitable route to market.”

“For the buyers our platform will streamline purchasing, reduce administration, simplify payments and provide a range of credit solutions.

Best of all it eliminates the need for sales reps to visit their venues, reducing the risk of spreading COVID-19 from business to business.”

Supporting wineries in pivoting to online sales during cellar-door closures, WINEDEPOT has more than doubled the size of its customer base over the last quarter welcoming some of Australia’s most iconic wine brands.

These include Henschke, Jim Barry (James Halliday’s Winery of the Year 2020), Brokenwood, Josef Chromy, Peter Lehmann, Primo Estate, Delatite Wines, Mollydooker and Casella Family Brands.

By leveraging its network of strategically located depots in each of the major capitals, WINEDEPOT’s Smart Logistics Solution allows wine producers to reduce both delivery times and costs.

For one of their customers, this helped to increase sales by 400%.

The volume of cases processed through the cloud-based platform over the last three months doubled as Australians took advantage of online ordering to purchase from their favourite wineries as an alternative to visiting retail outlets and shopping centres.

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