Digital wine club Winc gears up for $80-mln IPO. Here’s all you need to know

The virus-driven shift in consumer behavior has made businesses revisit their strategies, and the alcohol industry is no exception. While the IPO frenzy continues unabated, led by the technology and healthcare sectors, the market got a new fizz this week when digital wine club Winc, Inc. filed to go public.

5 mln Shares

Winc, one of the leading wineries in the country, aims to list on the New York Stock Exchange under the ticker symbol WBEV. In a regulatory filing, it revealed plans to offer around 5 million shares at a price ranging between $14 and $16. The lead book-running managers are Bank of America Securities and Canaccord Genuity.

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Headquartered in Santa Monica, California, Winc was founded in 2011 and initially known as Club W. The company operates a personalized wine club and a subscription-based website for the distribution of wines. The core brands include Lost Poet, Summer Water, Wonderful Wine Company, Folly of the Beast, and Chop Shop.

The data-driven brand development strategy and omnichannel distribution network give the company an advantage over traditional players in the market. There has been a marked increase in direct-to-customer sales since the early weeks of the pandemic when the movement restrictions came into effect. The good news is that customers are unlikely to go back to their previous shopping habits even after the pandemic ends.

Long-term Goal

In that context, Winc looks on track to achieve its long-term goal of growing into a leading brand builder in the alcoholic beverages industry. The company looks to leverage its balanced platform and unique process called Ideate, Launch, and Amplify, which allows the production of quality wines in a cost-efficient manner. The direct-to-customer model, supported by the omnichannel approach, is expected to drive sales going forward as the brand portfolio expands, offering customers more products to choose from.  

The alcoholic beverage industry is considered to be one of the largest total-available-market opportunities in the consumer goods arena, which helps companies like Winc grow market share while broadening their platforms across other beverage verticals.

Challenges

Nevertheless, it will not be an easy task for Winc to strengthen its foothold in a market that is ruled by traditional players who have built and established their brands over many years with heavy capital investments in assets and marketing. Also, several new-generation wineries are pursuing the DTC model to scale their businesses, adding to the competition.

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The company had more than 120,000 subscribers at the end of June 30, 2021. In 2020, it sold around 430,000 cases of wine, which represents an 80% growth over the past two years.  Revenue grew a whopping 78% and reached $64.7 million in 2020 from $36.4 million in the prior year. As a result, net loss narrowed to $7 million from $8 million.