Winefortune
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Winefortune

DISCLAIMER

This report is a digest of information on Winefortune product fff.vc has obtained during calls and workshops with Winefortune team with addition of a research made.

Pitch Deck: HERE

General overview

Winefortune - Fine wine investment platform, allowing customers to invest in alternative assets starting from 1€. All wines will be with full track record - NFT + RFID sticker on fine wine case/bottle. As founder says, “The only company in the world that democratizes the wine investment business for small investors and puts technology to work for retail investors.”

Wine as an asset class: Fine wines are an alternative asset class that offers stable value growth. The Liv-ex Fine Wine 100 index has risen 270.7% in two decades (July 2001 to July 2021), surpassing the S&P 500 index by 8% over the same period (source: Forbes).

Wines are often used to protect investment portfolios against market fluctuations and inflation. However, the wine asset class has been out of reach to retail investors due to its high financial and knowledge barriers.

Problem

Fine wine as an asset is one of the most inflation proof and one of the most stable returns, but:

  1. It is only available for selected elites,
  2. high entry and knowhow threshold,
  3. hard to manage asset without tech
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*Liv-ex tracks the price performance of 100 of the most sought-after and frequently traded fine wines

Solution

AI-based technology for full investment circle - starting from the selection process before others and selling to the best places available on the market. This product has several parts: subscription investments, automated marketplace, Wine auctions, and Wine fund.2100 (which is now being collected)

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Please note that one of the key differentiators of Winefortune is that in contrast to all alternatives, it allows retail investors to enter with as low as 1€.

The idea of Winefortune came from friends buying wine as an investment. There was no place to store it as it is tricky to hold in the right conditions for 15 - 30 years. They found one local (Estonian) manor cellar willing to collaborate and started sourcing the wines there in the right conditions.

2020 - Winefortune signed a deal with Liv-ex, the biggest B2B prime wine-reseller and also the most known wine index provider. The same year they got the first investor in Rain Roosimannus and started building the tech side in collaboration with Hologram development.

The next step is automated NFT for all the new wines from already producers. Wines are tracked - when, how, and where bottles have moved and which concrete bottle belongs to the customer/fund. It's also important to collect all the big data (trading amounts, trading place, trading price etc.)

Addressable Global Market

Fine wines part of all wine production in the world is approximately 1,5% and every year 6,5-7 billion € in value are being added to the market via wines.

From 2025 our goal for AUM is at least 1,6 billion value fine wines to our wine funds and customer portfolios. New customers' goal in 2025 is at least 200 000 with a minimum investment of 500 euros in a year.

Marketing

B2B:

The primary way to address B2B clients vie banks and other financial services. Mainly with private bank listing. The negotiations are ongoing with LHV and Swedbank to be listed on the alternative investment packages. Probably already from December 2022 listed in LHV.

B2C:

As things stand, Winefortune is acquiring users via performance marketing, having a spend of about 300-400€ per month. One of the best performing ways to acquire B2C customers is via financial influencers (vlogs and blogs). With tokenized program for referral campaigns Winefortune works with financial bloggers and financial field influencers. This is similar route how EstateGuru approaches in new markets.

CAC: € 21

LTV: € x7-8 (this is a projection taken on 4 year retention)

CAC payback period: Within 2-3 deals made on the platform

Price:

Currently operating from subscription packages and wine sales about 7% margin to the total yearly revenue. This margin was reached naturally after drawing a line under the last years numbers.

Sales Cycle:

Sales + Onboarding of B2C customers normally takes 2-3days. (reacting on the ad, registering and consulting, purchase)

MRR:

16 000€ (27 SaaS client 50-100€ per month)

Revenue:

2021: 87k€

2022: 120k€ as of today, with projection of 210 by the end of the year

Burn rate: 2100 €

Runway: end of Q1 2023

Product

The core value of Winefortune is to bring unknown, complex and segregated information to an everyday user. With this product user will be able to understand what wine should be bought having ROI in their minds. Integrations with LivEx, analytics, yield optimization, etc is the key.

Below, you can see the analytical process and decision making process that Winefortune relies on:

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Winefortune has several different models to offer to the market, you can see those below:

  1. Marketplace solution

Investing in fine wines means acquiring physical assets, ie bottles of wine, the value of which increases over time. The development potential of investment wine is at least 10-15 years.

To illustrate what is the product and what is its flow:

  1. Client picks wine through Winefortune, while Winefortune itself is being API integrated with LivEx to keep relevant prices and wines.
  2. Once client confirms the order, Winfortune API sends this order to LivEx,
  3. Open received order, LivEx accepts and sends the purchased bottle to Winefortune (warehouse, where they store the wine) OR directly to the client (if it has been bough with intention to use or store themselves)
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  1. Subscription (current go-to)

As part of the investment package, clients can choose the budget, risk level and amount that they want to invest in fine wines on a regular (monthly or weekly) basis. Winefortune experts analyze the world market's fine wines and select the ones that best match your selected investment goals.

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In Development + Future:

Fund

WineFortune is also raising wine fund as we speak. The fundraising for the fund is ongoing and as things stand, there is over 500k€ committed. Total fund size is being raised up to 2,5m€ to meet the allowance of the micro-fund license, which has been already acquired.

Due to rather successful fundraising, Winefortune is becoming more of an investment platform rather a product.

Setup of the fund is via LP, minimal contribution is 1€, Profit share: 80% LPs, 20% carry + 1,5% management fee in a year from invested capital to wines by fund.

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Operations from here on:

Start of the development of better AI/ ML algorithms to get better analytical capabilities for the fund. It is also planned to introduce NFTs to be matched per bottle to track history with less risk and add Web3 context.

After launching the fund and proving the concept, Winefortune will be focusing on the UK and French markets, as there is way more volume there

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Launched in: fine wines storage company started 2018, platform launch 2020 Q4.

Key Metrics: October 2022

512 newsletter followers

408 wine investors in total

4322 wines in clients portfolios

509 000 euros AUM in fund

Paying customers:

400+ investors (investing in a fund, subscription or physical wines portfolio.)

  • ARR - 80k€ last year and this year is 210k€ forecast, 160k€ done.
  • 27 SaaS client 50-100 per month subscription (2200)
  • 68 fund LPs proper. Success fee 80%/20% service + 1,5%

Investments so far

Amount:

About 110k€ raised until today

Investors so far:

About 110k€ raised until today

Startnow OÜ - Risto Kaljurand

Triniton Invest OÜ - Paavo Pärn

Input Industries OÜ - Rain Rosimannus

Arvutitugi OÜ - Lauri Luik

Hologram OÜ - Rasmus Rosimannus ja Jevgeni Hrapkovski

Seren Consult OÜ - Veronica Zäro

Cap Table:

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Team

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Risto Kaljurand - CEO, co-founder

Rain Rosimannus - Lead of technical development

Paavo Pärn - Physical storage, co-founder

Lauri Luik - Financials, co-founder

Rasmus Rosimannus - backend development

Jevgeni Hrapkovski - frontend development

Competitors

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VinoVest: US based / Raised Series A 2021 / At Vinovest, our sommeliers join forces with our quantitative investment models that analyze thousands of data points. We leverage our global network of connections to purchase wine on your behalf at the most competitive price. Minimum investment requirement 1000 dollars

Farandole: Farandole is a diverse community of wine & spirits professionals, passionate collectors, artists and blockchain enthusiasts from all around the world. Our name, “Farandole”, comes from a human-chain type of dance. With the majority of our team spread across France and Hong Kong, we are essentially a long chain of different personalities, connoisseurs, dedicated producers, brand owners, investors, NFT enthusiasts, artists, sommeliers, chefs and innovators all working together as one.

Round information

General Ask:

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Commitments so far, amount: 105k€ (5 angels)

Investment instrument: Equity

Pre-money valuation: 6,7m€

Round closing deadline: 31.11.21

Ask for Fund Fellow Founders

Fund Fellow Founders allocation: 300 000 € minimum

SPV Lead: Akim Arhipov / 10 000€

Min ticket to participate: 10 000€

Round Deadline: 31.11.2022

Funds allocation: AI + ML tool development

Upon Request available: Detailed Cap table / PnL / Fin Model

Risks:

  • Development costs are going up, more challenging to find good team in house for building the tech part
  • Wrong algorithm/decisions while purchasing wines

How is the downturn affecting Bisly?

  • Rather giving them the upper hand as wine market is rather stable and we can see cash flowing in more and more.

Reference: available upon the request