Australian convenience store giant 7-Eleven has acquired a majority stake in local alcohol delivery startup Tipple in an unexpected move by the international chain, which will see it gain access to the startup’s proprietary delivery platform.
Though the terms of the acquisition were not disclosed, the Australian arm of the 91-year-old chain took a “majority interest” in the company, but is keeping staff, including chief executive Ryan Barrington, on board.
Speaking to SmartCompany, Barrington says the deal came about through Tipple’s corporate advisor, as the business was in the process of seeking funding at the time of the deal.
“It was a bit of a ‘right place at the right time’ situation, as we were looking for funding and the 7-Eleven team were watching us as a potential company to reach out to, so it all came together,” he says.
With 7-Eleven having no significant alcohol plays in the Australian market currently, the Tipple acquisition may seem like an odd one for observers. However, the startup’s proprietary delivery technology would integrate well with 7-Eleven’s current business model Down Under, says Barrington.
“They understand convenience is changing, and everything is moving online, so I think they saw this as a great opportunity to get into online convenience,” he says.
“We built everything in-house, and we’ve lived through every situation. We started with our own bottle shop, built the tech for that, and then the tech and our business model evolved when we started using independent bottle shops around the country for our roll-out strategy.”
“We were the retailer, then the wholesaler, now we’re the end-to-end package.”
That allure of having technology that works for each stage and model of the business is what attracted 7-Eleven to the startup, says Barrington, believing Tipple’s business structure is very similar to 7-Eleven’s.
At this point, the two businesses will operate separately, but 7-Eleven chief executive Angus McKay indicated in a statement there could be “interesting opportunities” in the future for the two businesses to work together, though right now Tipple would just be using 7-Eleven’s customer insights and marketing to help grow the business.
“7-Eleven led the way in digital innovation with our world-first Fuel App, and continues to explore how we can best meet the evolving needs of our convenience customers through digital, delivery and in-store services. Tipple’s business model and platform is well-aligned with these interests, and has grown significantly since starting up less than three years ago,” McKay said.
Tipple was founded in 2015 and has seen success using data to better streamline and optimise its deliveries, in one case upping orders by 54% each year. Barrington says the acquisition is a mark of validation for him as a founder, saying the road to today has been a “long three years”.
“It’s had great ups and a lot of downs, and there are times you really doubt yourself and it’s not easy. But when the likes of someone like 7-Eleven comes and says you have a great business, the validation is great,” he says.
Barrington says there was no temptation to exit the business at the time of acquisition and is now focused on taking Tipple to be the number one alcohol delivery company in Australia, leveraging 7-Eleven’s marketing and customer insights to help do so.
“First thing on the agenda is to dominate alcohol, and once we’ve done that then we’ll look at integrating other synergies,” he says.
|Passionate about the state of Australian small business? Join the Smarts Collective and be a part of the conversation.|