Catch of the Day enters wine market with stake in Adelaide start-up, Vinimofo
Thursday, April 19, 2012/
Catch of the Day has entered the wine space through an investment in a daily deals start-up, in a move that signals the company’s willingness to acquire businesses rather than move into new categories organically.
This investment suggests co-founder and Chief executive Gabby Leibovich is more willing to acquire ready-made businesses, rather than grow them out of the Catch of the Day nest.
“It was even a surprise to me,” he says. “I’ve always wanted to build rather than acquire, but we really find the wine space tricky and we needed some industry experience.”
“You may expect another one fairly soon, as well.”
Catch of the Day has invested in the online start-up, Vinomofo, which was started by Justin Dry, Leigh Morgan and Andre Eikmeier in Adelaide last year. The business actually started as a blog, but eventually transformed and now has built up a solid industry reputation, with 30,000 subscribers and strong relationships with key suppliers.
The confirmation of the investment comes just weeks after Catch of the Day set up a page hinting it would be entering the wine space in a major way, after already selling bottles of wine through its Catch of the Day site.
“We’ve been selling wine for the past two years, but we know some consumers are not so happy about the way we were doing it,” co-founder and chief executive Gabby Leibovich told SmartCompany this morning.
“No one here really understands wine, especially myself, and there’s a big difference in selling cheap wine, to selling excellent wine at a good price.”
Leibovich would not reveal the size or stake of the investment. However, he did say it’s a majority stake, although Vinomofo will continue to operate under its own brand and structure. Catch of the Day will offer logistical support and any other backing the founders need.
“We could have gone forever doing what we were doing, but we’ve kept an eye on these guys, they’re a daily deals site which is great. We think very much alike.”
“They understand online shopping, but were just lacking financials and traffic. Now, they get an audience of two million people a day.”
The investment is a curious one, as it comes after Leibovich has continually said his company will start branching out into new categories – it already started a grocery website which is now among one of the most popular online retail destinations in the country.
Leibovich says although he prefers organic growth, he isn’t ruling out further acquisitions.
“We’re certainly not ruling anything out. If there is an opportunity available, and it can save people money, we’re happy to jump into that niche.”
“This is very much a win/win situation for everyone.”