July 9-10, 2013
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LOS ANGELES — A new online wine service plans to use its new funding to send out vintages in a “non-pretentious way,” as Club W has raised $3.1 million in a Series A round.

Club W uses an algorithm to provide customers with personalized wine recommendations based on their tastes and purchasing histories, said chief financial officer and cofounder Geoff McFarlane.

Chief marketing officer Ari Radetsky said that Club W subscribers must order at least three wine bottles per month, spending a minimum of $39 (not including shipping) at each interval. He said Club W sells bottles at two different price points: $13 and $19 for each individual bottle.

“We want people to learn, experience, and discover wine in a non-pretentious way,” said McFarlane.

Club W’s most significant competitors are traditional wine clubs and Wine.com. Radetsky is critical of Wine.com, citing its impersonal user experience and “bloated wine jargon that doesn’t help people connect with wine.”

Cofounder and chief business development officer Mark Lynn believes Club W’s business model is superior to the competition because it showcases small-batch curators, who produce the artisan-crafted wine favored by a growing share of the consumer market. A recently authored Forrester Research Report estimates that the domestic wine industry generated $35.9 billion in 2012.

Club W was founded by chief executive Xander Oxman, Lynn, and Mcfarlane in Denver in February. The company later relocated to Los Angeles and shifted its business development operations to startup accelerator Amplify LA’s Venice Beach campus, said Radetsky. He also said that Club W plans to spend the bulk of its funding on customer acquisition and increasing brand awareness. McFarlane emphasized that Club W’s marketing efforts will focus on the 25- to 35-year-old demographic.

Crosscut Ventures led Club W’s Series A, with participation from Guild Capital, L.A.-based Siemer Ventures, 500 Startups, Brenner International Group, Amplify L.A., and angel investor Csaba Konkoly.

Club W has raised $3.6 million in all and has sold over 100,000 bottles of wine, said Lynn. The company employs seven people full-time and is located in Manhattan Beach.

Image of McFarlane, Oxman, and Lynn courtesy Club W.

July 9-10, 2013
San Francisco, CA

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Twenty years after its initial release, Wine is just as relevant as ever. The software, which allows you to run Windows software inside of Linux and other Unix environments, is currently being ported to Android, reports Phoronix.

While the port is likely far from complete, having Wine on Android would mean you could run just about any Windows application (except for newer Windows 8 apps) on an Android smartphone or tablet. That would make Android an even stronger competitor to iOS, and it could make Microsoft pay more attention to Google’s mobile OS.

At a conference in Brussels yesterday, Wine creator Alexandre Julliard showed off the Android port. Phoronix’s Michael Larabel points out that the performance was “horrendously slow,” most likely due to running Android via an emulated environment instead of directly from an Android device.

Larabel notes that CodeWavers, the company that employs Julliard and sells CrossOver, a proprietary version of Wine, is particularly interested in the development of Intel x86 Atom chips for tablets. It sounds like it would be much easier for the company to port Wine over to Android devices running x86 chips. Julliard is also working on a version of Wine for ARM processors, which most Android devices run on.

Photo: Kenneth Lu/Flickr

Wine can be intimidating and often pushes people away just for the fear of looking stupid. (I know, it’s hard to believe anyone would feel insecure with a bunch of people slurping, swishing and spitting around them, but hey, this is the wine-snob norm.) TasteJive aims to open that culture up by referencing wine in a less sophisticated and more understandable way.

TasteJive relates wine to things you already know such as pop culture references, places, music, film, and more.

For instance, it might describe a wine this way: “With curves in all the right places and legs that just don’t quit, this wine will stop you in your tracks like a half-naked supermodel.” The accompanying photo of a half-naked supermodel will probably also stop you in your tracks, even if you can’t read the copy.

Or, it might rate a wine as “Overrated, and with a checkered past, like Kim Kardashian,” with a photo of Ms. Kardashian.

The wine search engine learns from your preferences, too. The more you use it, the more it detects what kinds of wine you like. TasteJive groups lovers of the same wine together and integrates with Facebook to give better, individualized recommendations based on what your friends like. The app is available on the web as well as on the iPhone.

“TasteJive enables its users to express themselves through short, clever wine recommendations,” said Paulo Lerner, chief executive and co-founder of TasteJive. “We’ve been having a lot of fun, both with the content and the evolution of TasteJive.”

Perhaps fun is the point. According to studies by WineBusiness.com, Portraits USA, and VinTank, wine is a $30 billion a year industry in the United States with more than 80 million people drinking wine in the U.S. each year. Of those 80 million, only 16 percent can be considered connoisseurs or enthusiasts. The rest of these people have no clue how to store red wine, don’t care about aerating it, probably drink Gallo from a refrigerated box, and need a little more entertainment in their lubrication education.

There are a ton of competitors out there who may not have the fun factor, but do have a deep wealth of insight into the wine industry. These include Wine.com, Snooth, Wine 2.0, HelloVino and more who may not have the most fun with their recommendations, but do appeal to a crowd who wants to learn more. These competitors also play the sophistication card, which may speak to the culturally refined side of wine. TasteJive is not afraid to take a more lowbrow, and they hope accessible, route.

TasteJive is a product of Kleintech, which was founded in 2009. There are six employees head quartered in San Francisco working on TasteJive, with a Brazil office and outsourced engineers in Russia. The company has raised a $1 million seed round from private Brazilian angel investors.

TasteJive is one of 80 companies chosen by VentureBeat to launch at the DEMO Fall 2011 event taking place this week in Silicon Valley. After our selection, the companies pay a fee to present. Our coverage of them remains objective. There’s still plenty to see at DEMO, and VentureBeat readers can get a special discount on registration for the remainder of the show at demo.com/VBDay.

The company, which aims to introduce eCommerce solutions to a very segmented business, received $1.3 million in funding from Kholberg Ventures and other members of its board.

There are many granular challenges serving a niche, luxury industry such as wine. These challenges become so complex, they can significantly drive down business productivity and success. The hurdles are high, such as regulatory laws and fragmented internal operations. Thus wineries have been very slow to adopt new eCommerce technology.

Vintners’ Alliance co-founder Ahin Thomas spoke of one hurdle in an interview with VentureBeat. “A winery has one of seven eCommerce platforms, one of four point-of-sale systems, one of four or five email service providers, and then they may or may not have Google analytics,” he explained.

Vintners’ Alliance can operate over any combination of these products and provide sales analysis to help wineries market back to customers. The system pulls purchase history data, customer location, the type of wine a customer purchases, and time since last purchase. The technology aims to help vineyards decide what offers should be sent to which groups of customers.

Marketing wine is not an easy task, however as seen by Wine.com’s own struggles. The company which launched in 1998 is still alive today, but not before sucking up $200 million in funding and dropping down to a low $120,000 valuation in 2006.

But Thomas feels Vintners’ Alliance is not competing with Wine.com at all.

“Well, their big pain is distribution,” he said. “[Their] model is ‘I’m going to take on all this inventory, make margin on that and then I’ll create this giant marketplace and consumers will come there.’”

Instead of taking on the inventory, Vintners’ Alliance hands the  marketing reigns over to the vinyard and gives them data to market and advice on how to market back to the correct audience. Vintners’ Alliance is essentially an agency or consultant.

Paul Maybray, a former employee of Wine.com and current chief strategy officer at VinTank, a wine industry think tank, believes in Vintners’ Alliance’s ability to survive.

“They’re armed by nature of failures been made,” he told VentureBeat in an interview. “[These failures] left a good roadmap for what to do and what not to do. I’m sure there are still some turns to be made, but I think they’re approaching it fom a very interesting angle.”

For Maybray, one of Vintners’ Alliance’s biggest challenges will simply be competition in the wine world. “There are about 150,000 wines approved each year, it’s very competitive…There aren’t 150,000 soaps.”

Thomas plans to use the funding to hire more employees. Vintners’ Alliance was founded in 2009 and has presence in San Francisco, Mexico, London, Uruguay, and Bangladesh.

“We raised a small amount of money from individuals that we felt bought strategic value to the company, the Quidsi founders were in that group,” says Lot18 founder Philip James. “In total the round was less than $1 million.”

That’s not a whole lot of cash compared to other funding announcements, but this is a case of “who’s who” and not “how much.” To date, Lot18 has raised more than $13 million.

Marc Lore and Vinit Bharara, the Quidsi founders, are apparently personally interested in the American wine market, which is worth billions. They say online sales currently account for only a small percentage of that amount and believe Lot18 can provide an engaging customer experience. Perhaps they see Lot18 as a potential Quidsi-like site. Quidsi, by the way, will be launching Yoyo.com, a site for toys, in the very near future.

“Marc Lore, Quidsi’s founder, emailed the Lot18 member services email out of the blue and asked to meet us,” says James. “Wine sales and distribution are highly regulated, so it’s challenging for ecommerce companies who sell unregulated items to successfully enter the space.”

This explains why Quidsi hasn’t started their own ecommerce site for alcoholic beverages, and why Quidsi’s founders would be interested in someone who has already tackled this complicated industry.

Lot18, which claims 400,000 users and more than $1 million in monthly sales, was founded in 2010 by Kevin Fortuna and Philip James. Fortuna was formerly CEO of Quigo, an advertising technology company sold to AOL Time Warner for $360 million in November 2007. James was the founding CEO of Snooth, a massive wine website.

In nine months of operation, Lot18 has grown to more than 400,000 members and more than 80 employees. This funding will support “additional verticals soon to launch,” according to the company press release. Its careers page indicates it will also be spending lots of money on new hires. Currently Lot18 provides access to rare and hard-to-find wines and artisanal food such as olive oil, chocolates, caviar and coffee. Much like Quidsi, it will be interesting to see what other verticals the company ventures into.

[Updated with investment amount and quotations from James.]

July 9-10, 2013
San Francisco, CA

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“Wine is, in truth, the only antidote to the bane of whiskey” said Thomas Jefferson. Copenhagen-based Vivino helps you identify and locate your favorite antidote for future consumption. The company just received an angel investment from Skype co-founder Janus Friis as part of its strategy to go global.

You can use the free Vivino app to take a photograph of any wine label. Vivino uses image recognition to match the label against its database of 450,000 wines and return you all the information available about the wine including, hopefully, where you can buy it locally. The app saves the details of all wines you have matched and you can also record whether you liked a particular wine or not. The business model is based on a revenue share with wine distributors.

“We’re the bridge between tasting a great wine and buying it” says Vivino co-founder Theis Sondergaard. Songergaard and co-founder Heini Zachariassen claim to reflect their target audience quite accurately. “We really like wine, but we don’t know that much about it. We know what we like, when we taste it, but we don’t have a wine-cellar, just a row of bottles in the kitchen.” continues Sondergaard. “We use the Vivino app to educate ourselves a bit about the wines we drink, remember what wines we’ve enjoyed and want to try again, and the ones to avoid. “

Swiss company Kooaba provides the image recognition technology. Kooaba can match against an image-set of 2 million labels in less than a second. Wine labels shot from different angles or in different lighting conditions can be matched; an important feature when dealing with images taken in restaurants or low-lit rooms.

Currently Vivino can automatically match 60 percent of wine labels and the company aims to get up to 80 or 90 percent. When a label can’t be matched Vivino’s data team goes into Sherlock Holmes mode and tracks down the details within 24 hours to make a manual match. The most common matching error (2-4 percent of matches)  is the vintage since this is often in small font on the labels. The data team also checks every automatic match to correct such errors. Vivino plans to combine object character recognition, basically a form of text recognition, with Kooaba’s image recognition to improve matching further.

Vivino isn’t alone in this space. Social wine review site Snooth launched its own wine recognition app in September, 2010. Snooth has a larger database of wines than Vivino and has a complementary and well-established review web site. However, it is very focused on the U.S. market. Snooth’s app is also only available for the iPhone whereas Vivino also supports Android, Blackberry and Windows 7. If you are an Android-owner who lives in Amsterdam, where Vivino lists several locations to buy the wines it identifies, there isn’t much contest.

“Nobody has really claimed the top spot for being THE wine app.” says Sondergaard. Being the top global wine app is Vivino’s goal. Vivino’s most comprehensive coverage of wine outlets is currently in its home market of Denmark. Sondergaard told me that the Danish market is relatively complex, with many small players and exclusivity deals, making it a good test market.

I asked Sondergaard about Vivino’s global ambitions. “This is a global concept but we need to roll out the business market by market like Groupon. Unlike Groupon we acquire customers via our free app. We start by creating the order and then figure out how to fulfill it (via local wine distributors)”. Vivino is already a global company in that the development and data teams are located in Ukraine, Macedonia and India. According to Sondergaard “Being based in Europe gives us a certain advantage in European markets”. Every European country has a different language, taxes, shipping options and even currency. European developers have to internationalize from day one.

However, Vivino’s next big target is the U.S. where it plans to roll out the “buy” feature in the next few months. The angel investment it recently received from Skype co-founder Janus Friis will help. “In 2002, Heini and I, along with Morten Lund, founded BullGuard, a consumer internet security company. Back then, we partnered with Kazaa, and even though Janus was no longer involved in Kazaa at that time, we got to know him. So when it was time to get an angel investor for Vivino, we knew who our first choice was.”

Cracking the U.S. market is the company’s biggest goal for the next year. New features like special or group buying offers, based on which wines are popular in particular markets, are also on the agenda. But it won’t be all work and no play. “We want to drink some amazing wine and have a blast while we do it” concludes Sondergaard.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Snooth just launched an iPhone application which uses image recognition to do something genuinely useful (as least to me). If you take a picture of a wine label, Snooth finds the stores closest to you that stock that wine and the prices in each store. You can also read reviews of the wine and find similar bottles by winery, region or varietal.

The app uses a specialized image-recognition technology from Canadian startup TinEye. Most wine labels are on a curved surface, so the software must be able to find images that are slightly rotated, warped, cropped, blurred, have skewed colors or have been taken in a location with low lighting like a restaurant. In fact, identifying where to buy that wonderful house wine is one of the main scenarios in which you might use Snooth’s app. Others include price comparison when you are in a wine shop.

820,000 wines are searchable via image recognition, and Snooth links to 11,000 wine merchants worldwide. Snooth is not the first company to consider this application for image recognition. The most notable is Google Goggles, but the Goggles database never actually listed a useful number of labels.

Snooth Wine Pro is available in the iTunes App Store for $4.99. Users can also install Snooth Wine, a free, ad-supported version. Snooth’s core product is a social, wine review site whose business model is based on lead generation and selling data to wineries and wine merchants on where potential customers might be located. Snooth is based in New York and is privately funded.

Getting content noticed is a challenge for everyone making apps. We’ll cover the topic at DiscoveryBeat 2010. Startups and big companies alike are encouraged to submit their discovery tactics to our Needle in the Haystack competition. Early bird discounts are available until September 22. Sponsors can contact us at sponsors@venturebeat.com. To buy tickets, click here.