Inertia Beverage Group, host of an online wine marketplace facilitating direct sales and trades between wineries and consumers, has brought in $14 million in a new round of venture capital to strengthen its core offerings and give competitors like Vinfolio a run for their money.
Now's not a great time for winemakers. Even with the holidays coming up, the poor economy has put a pinch on discretionary spending, hurting sales of even mid-level brands. This has proved to be somewhat positive for the industry, however, prodding more vintners, collectors and enthusiasts to turn to technology to get the wine and sales they want. In October, Vinfolio cellar coordinator Christina Pate wrote a guest column running through the new ways people are using the internet to engage with the wine trade.
Now it looks like Inertia is taking this ball and running with it. The idea is to use an online marketplace to expand the audience for wine while simultaneously lowering costs for wineries and consumers alike. Without middlemen and distributors cutting their own fees, consumers can score deals on fine wines, and vintners can drive up demand when they need to most. Now it's just a matter of getting the word out, and continuing product development.
The fresh capital, provided by Allegis Capital, Sid R. Bass Associates, and PEI Funds -- all existing investors -- landed at a good time. Inertia has just gone through some restructuring, which the company says has made it much more nimble and saved ample costs, even following the acquisition of New Vine Logistics, a wine marketing and shipping firm. Altogether, the merged entity has 350 customers, 40 of which were added in the last three months.
At this stage, Inertia appears poised to lead the direct-to-market wine business online. While Vinfolio does have a marketplace component, which is mostly auction-based, its core business is providing software to cellars to manage their inventories. By making fast and simple wine e-commerce its exclusive focus -- and by not restricting its business to luxury brands -- Inertia could come out on top.