Underground Cellar, which aims to entice wine buyers with the promise of random upgraded bottles of wine, announced today that it has raised a $12.5 million Series A round of funding. The round was led by Accomplice, with participation from Golden Ventures and Bling Capital.
There are plenty of players in the online wine space such as Vivino and Winc that recommend and sell wine, but Underground Cellar’s hook is its gamification of the wine-buying process. Rather than discounting wines, it offers customers the chance for free upgrades. For example, someone might purchase three $20 bottles of wine through Underground Cellars. However, after purchase, Underground Cellar upgrades one of those bottles to a randomly selected, more expensive wine. So the customer could receive a bottle worth $50, $200 or much more.
In addition to its upgrade program, Underground Cellar also offers customers the ability to store up to 500 bottles of wine in the company’s temperature- and humidity-controlled facility in Napa Valley. This “Cloud Cellar” holds the purchased wine, and when customers are ready, they select bottles from their collection and Underground Cellar ships them off for delivery.
Underground Cellar’s funding could be coming at just the right time. Wine Spectator wrote back in December of 2020 that the U.S. wine market grew just 0.1 percent last year, with 328.9 million cases sold. However, Rob McMillan, executive vice president of Silicon Valley Bank’s wine division, told Wine-Searcher in April of this year to expect a wine boom over the next year as the pandemic recedes. Wine-heavy events like weddings, which were put on hold last year, will be back and there will be pent-up demand to celebrate.
With its new funding, Underground Cellar says that it will enhance its gamified platform, deepen relationships with wineries and triple the size of its team by the end of the year.