NSW start-up Winegrowers Direct is to make an all-out pitch for $2.35 million in funding this week as it aims to embark upon an international expansion drive.
The business, which was founded by Andrew Dal Broi in 2009, is holding presentations in Melbourne and Sydney on Wednesday and Thursday, respectively, in an attempt to secure the finance.
Dal Broi says that he is willing to give away 19.8% of the company for the cash injection, claiming that there has already been interest from investors in Australia and China.
Winegrowers Direct, which is projected to have $7 million revenue in this financial year, plans to enter the New Zealand market in 2012, followed by further expansion into Asia.
“The business shows the beauty of online – you can increase turnover by 40-50% and have the same turnovers. You can have the same warehouse for 10,000 orders as 100,000 orders,” says Dal Broi.
Winegrowers Direct allows consumers to order wine online. The business buys direct from wine growers, effectively cutting out the retail middlemen.
Dal Broi predicts that the direct-to-customer model is one that will be increasingly embraced by start-ups in coming years.
“If you told me three years ago that you could sell wine online, I’d laugh at you,” he says. “But there are so many things you can offer consumers with different models – look at what Kogan is doing with pre-payments.”
“If you look at the big retailers such as Myer or Harvey Norman – what is to stop their suppliers doing the same thing and make the margin that they do? The challenge for start-ups will be the digital space and how they market themselves.”
Dal Broi is being aided in investor negotiations by Jack Delosa, executive director of advisory group The Entourage.