Sydney-based online wine retailer Cracka Wines have announced its plans to raise $5 million from its 250,000 customers, as it prepares to expand its direct-to-consumer marketplace into Asia.
Mum and dad investors will get first dibs to invest in Cracka Wines. Leveraging recent changes in government legislation, the company’s CEO Dean Taylor has appointed crowd-funding firm Equitise to manage what could potentially be Australia’s first and largest major crowd-sourced funding raise, when the bill is enacted later this year.
Taylor indicated that “a good chunk of the capital raised will be used to fund the expansion of their inventory management and logistics capability.”
“Many local retailers are worried about Amazon entering the market, but we see it as a massive opportunity. Alcohol is something that Amazon have struggled to manage within their own logistics network. Even in the USA, they don’t accept alcohol within FBA (Fulfilment by Amazon). We’ve developed a unique logistics model that we believe fills that void, allowing us to fulfil direct-to-consumer orders on a broad range of premium products, both locally and internationally. Our intention is to progressively roll the model out in other Asian capitals.”
Since it’s launch in 2010, Cracka Wines has been committed to building a marketplace that allows consumers to connect directly with producers, cutting out the middleman and releasing value that can be shared between them, so its latest crowd-sourced funding announcement is certainly in line with connecting further with its consumer base.
“We’ve developed a robust, highly scalable technology platform that produces significant sales volumes for our winery partners here in Australia. It’s time to expand our horizons to allow the small and medium wineries that we work with to sell to consumers all around the world.”
The Australian Crowd-sourced Funding Bill passed earlier this year allows mum and dad retail investors to purchase up to $10,000 of equity each year in unlisted public companies, an option which has previously only been available to venture capital funds, family offices and sophisticated investors with a minimum net worth of $2.5 million or income above $250,000.
Taylor says that giving its most loyal customers the opportunity to invest aligns with Cracka’s longer term vision to take the company public. “While we are too small to do this just yet, we see a crowd sourced funding raise through a platform like Equitise as the first step in this direction. It’s a great vehicle for a pre-IPO round providing both expansion capital and diversifying our investor pool.”
According to Taylor, customers who choose to invest in Cracka will also enjoy a range of shareholder benefits. “We expect most of the interest and demand will come from our most active and loyal customers, so it makes sense to give them priority access, preferential pricing and invitations to special events”.
In 2010 Cracka Wines was launched by serial entrepreneur Dean Taylor, with a mission to offer the biggest range of wines in the country with unbeatable deals delivered to the customer’s doorstep. Cracka Wines aims to connect everyday Australians with the best wine brands in the country, and with their unique daily falling-price auctions, Taylor says “it’s a Cracka of an experience”. Today the brand has a loyal consumer base of over 250,000 Australians. The company is now looking towards overseas expansion, with Asia next on the horizon.