A Sydney-based startup building a Spotify-inspired subscription platform for wine lovers has secured $500,000 from angel and private investors to grow its technology and team.
According to The Wine Gallery’s founder and chief executive Tom Walenkamp, the platform is different to other online retailers and startups in the market because it uses customer data, including responses to a palate quiz, ratings and “intelligent tagging”, to recommend wines according to each buyer’s taste
“We think of ourselves as monthly wine deliveries personalised to your taste,” Walenkamp tells StartupSmart.
“We’re 100 percent personalised [so] everyone goes on their own individual wine journey.”
Each bottle of wine on the platform is tagged based according to between 20 to 30 different characteristics, including region, flavour and acidity, says Walenkamp.
These characteristics are often “too intimidating” for people to get their head around so The Wine Gallery’s quiz is designed to simplify the process of navigating through these traits and selecting wine, he says.
The platform, which launched as a basic e-commerce business in 2015, has acquired over 10,000 subscribers since it switched to a subscription model “a little over a year ago”, says Walenkamp. His goal is to hit $1 million in turnover by the end of 2017.
“Originally, the business was a little bit different,” he says.
In the early days, Walenkamp and his co-founder Banjo Harris Plane, a renowned sommelier in Australia, would meet with customers in person to help them choose wine based on their preferences.
But in April last year, Walenkamp says the pair decided to bring in tech co-founder Humberto Moreira to help scale their offering with a “tech recommendation engine”.
“[Moreira] made a world of difference,” says Walenkamp.
And with the $500,000 investment, The Wine Gallery will now develop a peer-to-peer recommendation system, inspired by Spotify, so customers can link preferences with others.
Walenkamp says the funding will also be used to grow The Wine Gallery’s team to 10 employees by the end of 2017.
“We’ve managed to do this with three people and it’s been going well but we really want to start investing in the skill set that will help us to grow more quickly and keep up the customer service that we currently provide,” he says.
Bootstrapping with social media
Walenkamp says social media has played a crucial role in The Wine Gallery’s success to date, with the startups first sales all coming through Instagram and Facebook.
After looking at the type of content posted by other popular consumer brands like Frank Body, Walenkamp says he spotted a gap for “fun wine brands”.
“That’s the number one way we were able to grow by bootstrapping,” he says.
The Wine Gallery took a “trial and error” approach to posting on social media and shared not only information about wine but jokes and other funny content, says Walenkamp. Today, the startup boasts more than 30,000 followers on Instagram and continues to post three to four times a day.
“Once we built up that audience, we said, ‘by the way we offer this service’,” he says.
Using social media to drive word-of-mouth and friend referrals has been a key focus at The Wine Gallery since day one and the startup continues to drive this in range of creative ways such as including “instagrammable” quotes in packaging.
“We kind of even designed our packaging around its shareability online,” Walenkamp says.