Online retailing giant Catch of the Day has spun off its wine-based acquisition Vinomofo just over a year after it purchased a stake in the business, labelling the sale as the first of many in a new start-up incubator program.
But Vinomofo co-founder Andre Eikmeier told SmartCompany the business also reached a point where the founders missed their independence, and saw an opportunity to grow beyond the daily deals model.
“Catch was pretty hands-off and encouraging, it wasn’t like a dictatorship or anything. But we started to get a feeling that…as our appetite grew, we looked at moving on from the group. It was a change in focus.
“It wasn’t the original plan,” he says, although places a caveat on this by saying the sale process has been amicable. “It’s beyond amicable,” he says.
The company has now been bought by a “small group” of Adelaide-based investors, says Eikmeier, who want to remain anonymous. “They were partly people who were interested back when we partnered with Catch,” Eikmeier says.
Vinomofo’s founders have kept a majority stake, while Catch of the Day has sold its entire interest in the company.
Eikmeier said the founders of the company realised their goals had diverged from the original Catch of the Day plan – they wanted to go beyond daily deals and into new opportunities.
The Vinomofo crew approached Catch of the Day, and it was agreed the business would be better off finding new investors.
The incubator program, Sketchbook Ventures, was born out of this process. Catch of the Day had toyed with an incubator style program before, and Vinomofo represented a good opportunity to test-drive that process.
“The incubator was the formalisation of that process of moving on,” says Eikmeier.
Catch of the Day says the incubator program will invest in digital start-ups, help them refine their business models and “accelerate their growth”.
Catch of the Day co-founder Hezi Leibovich says the company has played with the idea of an incubator, but it was never developed into any sort of process.
“But through this process, we thought we found something that could work quite well and we could do more of them.”
By “this process”, Leibovich is referring to the Vinomofo sale. He says the company was able to realise its value elsewhere, saying the move is “great for us, and great for the founders”.
“They were given an offer that we agreed shouldn’t be refused.”
Eikmeier says partnering with Catch of the Day has been a positive experience.
“Both in lessons learned and the actual growth we’ve had, it’s been great. The past 15 or 16 months have been awesome.”
Now, Leibovich says the incubator program will continue to focus on customer-centric businesses in the online retail space – and that Catch of the Day will still be selling wine.
“We’re open to all ideas online,” he says.
“Whether it’s e-commerce or something else, we’ve got a great set of resources and assets that we can plug into businesses to help them skyrocket. And we’re looking for those businesses now.”