Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic from Bloomberg Radio. We mentioned this
Speaker 1: last week. It was our bite of the day. I think,
Speaker 1: in fact, about how wine startup Aevino raised fifty five
Speaker 1: million to expand into new countries at some staff build
Speaker 1: out its recommendation engine after more than doubling, doubling wine
Speaker 1: sales during the pandemic, more than doubling. So here to
Speaker 1: talk more about what they are doing is Heiny Zacharias,
Speaker 1: and he is CEO and founder of the wine apps
Speaker 1: startup Pavino. He's on the phone from Copenhagen and full disclosure,
Speaker 1: I love great red wine and I use the Vivino app.
Speaker 1: In fact was using it over the weekend. UM, honey,
Speaker 1: nice to have you here. Welcome or welcome back. Thank
Speaker 1: you very much, very glad to be here. So first
Speaker 1: of all, I want to talk about the capital raise,
Speaker 1: but I really also want to find out what this
Speaker 1: year has been like. UM. For you take me back
Speaker 1: to kind of last March in April and the pandemic.
Speaker 1: What was going on in your business, what was going
Speaker 1: on with your employees, what were you seeing in terms
Speaker 1: of consumer trends. Yeah, it was a little bit of
Speaker 1: a crazy time honestly because we we didn't know what
Speaker 1: was going to happen, right, so we had we have
Speaker 1: people in Hong Kong too, they had seen something. But
Speaker 1: once it hit the US, we're talking mid marchers, so
Speaker 1: we actually started by sort of pupping the brake a
Speaker 1: little bit and say, Okay, what's this gonna be, what's
Speaker 1: this gonna look like, what's gonna happen to our sales?
Speaker 1: But we pretty quickly saw that it was gonna move
Speaker 1: us sillswise in the right direction. So so things when
Speaker 1: we had twenty of the March, things just jumped, you know,
Speaker 1: revenue just went way way up there in the beginning.
Speaker 1: We also had a little bit problems with you know,
Speaker 1: customers support and supply and so on, so that took
Speaker 1: us a month or two to really get back up
Speaker 1: to speed. But like a crazy time for us, and
Speaker 1: and you know it was it was rough, but but
Speaker 1: numbers were good. Yeah, but so pretty quickly March that
Speaker 1: all of a sudden, um, you know, and has it
Speaker 1: been pretty consistent in terms of growth or have you
Speaker 1: seen a steady increase from month to month. It was.
Speaker 1: It really jumped for for two or three months and
Speaker 1: like totally crazy, right, and we may be in the
Speaker 1: beginning thought, okay, what is this is just like a
Speaker 1: short term thing. People want to make sure they have winers.
Speaker 1: So but then stabilized at a certain level and and
Speaker 1: it's been really really good ever since that, you know,
Speaker 1: just more buyers converting and and just higher numbers all over.
Speaker 1: And even when Europe sort of opened up over the summer,
Speaker 1: we didn't see numbers really go down again. So we
Speaker 1: just landed at a new level. Well, that's what I
Speaker 1: want to ask you, and I'm sure listen, honey, that
Speaker 1: a lot of people are asking you, and we all
Speaker 1: wonder that, Okay, there are these trends. Whether you're a peloton,
Speaker 1: whether you're you know, what have you? You know, do
Speaker 1: what we've seen over the last year because of the
Speaker 1: pandemic and we were forced to predominantly be in our homes,
Speaker 1: work from our homes, living our homes. Do do those
Speaker 1: trains trends stay with us? What indications do you have
Speaker 1: that the growth that you've seen that you hold on
Speaker 1: to it and it continues to stay with you As
Speaker 1: the world start it's to reopen. Yeah, it's a good question, right.
Speaker 1: I think first we can say for certain like wine
Speaker 1: is probably not a fan, right, it's probably gonna stay
Speaker 1: with it. That in my world, so so they're probably
Speaker 1: gonna keep buying wine. But what our theory and what
Speaker 1: we we we've seen so far, especially when you're opened again,
Speaker 1: is that, you know, it's really really hard to get
Speaker 1: people to change habits. But if you have something that
Speaker 1: is more convenient and easier and so um, you know,
Speaker 1: they don't go back. Like like we buy most of
Speaker 1: our supermarket stuff online now miss me personally, and I
Speaker 1: would never go back, Like, once I've seen it work,
Speaker 1: I'm just not going back. And the same goes for
Speaker 1: something like Amazon. Right, there's a reason why we do
Speaker 1: it because once we start doing it's it's incredibly convenient
Speaker 1: and and the same goes for for buying wine online. Well,
Speaker 1: and I'm curious about your demographic. Who do you have
Speaker 1: a typical user, and if so, describe who they are
Speaker 1: and what kind of buying do you typically see from them.
Speaker 1: So so we we have to demillion users around the world,
Speaker 1: so it's really really difficult for us to to say
Speaker 1: what a typical user is um. Previously, I would say,
Speaker 1: pre pandemic, it was people that were a little bit
Speaker 1: more into wine, not like not the high end user,
Speaker 1: more the the higher end of the casual drinkers. But
Speaker 1: now I think it's changed, Like we we see everybody
Speaker 1: doing it now. We also see price points moving down.
Speaker 1: That doesn't mean people dry, people buy a wine that's
Speaker 1: less expensive. It just means that we're taking more from
Speaker 1: the offline part and people are starting to buy less
Speaker 1: expensive wines online now too. Full disclosure. I love the
Speaker 1: you know app. I use it. I think what's really
Speaker 1: cool about it um Honey, to be quite honest, is
Speaker 1: I can be anywhere and if I have someone, I
Speaker 1: can quick take a picture, I quick get some views,
Speaker 1: I can buy it. Like it's just wonderful and it's
Speaker 1: so easy. I do wonder too, like how sticky is it?
Speaker 1: Once you've got somebody who's on the platform, do they
Speaker 1: automatically become a buyer a shopper? Do they continue to
Speaker 1: increase it? Like? How does it? How does it play out?
Speaker 1: It varies quite a bit. It is obviously the app,
Speaker 1: so you do lose a lot of people in the beginning,
Speaker 1: but once people start going right after people have used
Speaker 1: it for you one year, it just doesn't change like
Speaker 1: once their own board have used it for one year.
Speaker 1: That feels like it's a lifetime. We've been around for
Speaker 1: ten years now so we have pretty good data on that,
Speaker 1: so so the people that really appealed to and they
Speaker 1: just keep going, so so that's amazing. Obviously we built
Speaker 1: new features all the time and so on to make
Speaker 1: it better and better. Is the US your best market?
Speaker 1: Your fastest growing? Or where is it? US is by
Speaker 1: far our biggest market commercially around Our sales are in
Speaker 1: the US, so by far the biggest, not the fastest growing,
Speaker 1: I mean relative to to the market, it's by far
Speaker 1: the biggest. But but some other markets have started late.
Speaker 1: This might be a strange, but actually France started relatively late. Really,
Speaker 1: it took them a while, took scept us like we're
Speaker 1: not French show, so they wouldn't accept us. But now
Speaker 1: they love us so so we're happy with them now. Well,
Speaker 1: so what are you gonna do with the money hundred
Speaker 1: million that you guys have raised? How do you need
Speaker 1: to spend it? And I am always curious for an
Speaker 1: app like yours, what's your most expensive you know when
Speaker 1: you go through the balanty, is it the people, is
Speaker 1: it marketing? What's the most expensive item line item. Yeah,
Speaker 1: we're very privileged in the way that we spend very
Speaker 1: little money on marketing historically, right because we have twenty
Speaker 1: thousand people that installed up every single day organically. So
Speaker 1: that's a privilege when it comes to that that might
Speaker 1: change in the future, just we we have a little
Speaker 1: bit more cash now, but but for us, it's all
Speaker 1: about helping people drink better wine. So number one on
Speaker 1: our list is really operating product and engineering just to
Speaker 1: make the product even better, and a lot of that
Speaker 1: is about using machine learning and AI to really learn
Speaker 1: every single use. So you know, we know all these wines.
Speaker 1: We have twelve million wines on there, and then we
Speaker 1: have these fifty million research and one thing is giving
Speaker 1: them ratings. But we want to give them personal ratings,
Speaker 1: just like Netflix does. So we're launching something called match
Speaker 1: for you. So once once she was scand of wine,
Speaker 1: you're not just gonna see the ratings, also going to say,
Speaker 1: you know it's eight nine and certainly chindibl like this wine,
Speaker 1: so that we're very excited about it. That's really interesting.
Speaker 1: That's really clever. Where are the areas in the world
Speaker 1: that you're not yet in terms of geography that you
Speaker 1: want to be, that you need to be. Yeah, I
Speaker 1: think Asia has been a slower region for us. Usually
Speaker 1: starts with the real wine lovers that start using it,
Speaker 1: and then it's slow. Then it spreads after that, but
Speaker 1: there's no doubt about like North America and even South
Speaker 1: America and Europe our strongest places, Asia is lagging a
Speaker 1: little bit after but we're starting to grow there now.
Speaker 1: So yeah, no interesting, Um, and I'm also curious. So
Speaker 1: I think I was just looking at some of the
Speaker 1: numbers and at least some of our reporting. This recent
Speaker 1: funding round million values you you guys between six and
Speaker 1: eight hundred million. Does that feel about right? That's a
Speaker 1: good question. We have some bloom Brig analysts estimate that,
Speaker 1: and I'm not kind of coming in further. Okay, fair enough,
Speaker 1: fair enough, Maybe over a glass of wine we can
Speaker 1: talk about it. Sometimes it's gonna take a lot of wine. Okay,
Speaker 1: that's fair a lot of good wine. Um, you're not
Speaker 1: profitable yet, right, and probably not this year nor next.
Speaker 1: Why if it's doing so well and you guys are
Speaker 1: adding you know, I'm just curious. Actually, we were profitable,
Speaker 1: so we so we did bring even as soon as
Speaker 1: this hit, we broke even, and I honestly I think
Speaker 1: that's also why we managed to really raise a lot
Speaker 1: of money. People say, wow, this business really really works.
Speaker 1: The unigonomics are Charlotte. The growth is there. Let's put
Speaker 1: some real money on this and see if we can
Speaker 1: grow it even faster. Show. So we've really shown that
Speaker 1: the business model of the Unigonomics are strong and that
Speaker 1: profitability continues this year, next year. There's your pretty confident
Speaker 1: of that. We're not Yeah, no, we're not planning to
Speaker 1: do that because now we really want to invest right.
Speaker 1: So so we've managed to show that, you know, it
Speaker 1: all works, but now we're going to invest a lot
Speaker 1: more fuel the growth. Got it? Got it? And so
Speaker 1: what's the endgame for you guys? Do you plan to
Speaker 1: I know, and I know you probably get asked these
Speaker 1: questions a million times, but I have to ask you, um,
Speaker 1: what is the endgame? Go it alone? Continue to grow
Speaker 1: the business. You've just gotten another capital raised. There's a
Speaker 1: lot of money out there. There's also a pretty healthy
Speaker 1: I p O market, you know, and it's been yeah, exactly.
Speaker 1: So how do you want to do it? I think
Speaker 1: it's a good question. I think my answer has always
Speaker 1: been and and and you know, we're closer to something
Speaker 1: now obviously, but really build a sustainable business, also a
Speaker 1: business that could stand alone. Right when you think about
Speaker 1: the wine market being like almost like four hundred billion dollars,
Speaker 1: If we get a slice of that, this could be
Speaker 1: a really big sustainable business. So you know, I think,
Speaker 1: you know, someone might be interesting acquiring us, but I
Speaker 1: think I p O is something I really like at
Speaker 1: some point too well. And it sounds like, you know, honey,
Speaker 1: from what you told me, is now that you've got
Speaker 1: this money, but you said you did break even. You've
Speaker 1: shown kind of the world that we can do this. Um,
Speaker 1: so you've got some more money that you mentioned you
Speaker 1: want to put into upgrading your product engineering and so on.
Speaker 1: Is that what you need ideally to kind of move
Speaker 1: the platform in the business to the next level because
Speaker 1: you've got a lot of users. Yeah, yeah, yeah. But
Speaker 1: I think it's also about like the thing about we
Speaker 1: are a global business, right, we are actually in seventeen markets.
Speaker 1: The marketplace open in seventeen markets, right, We're only two
Speaker 1: hundred people. So we really want to go a little
Speaker 1: bit deeper into each market there and increase our our
Speaker 1: our foot our footprint in each single, each single market there.
Speaker 1: So I think that's very important for us. All right,
Speaker 1: So before we go, what's your favorite rhine? Our favorite
Speaker 1: few wines? That's you know, I've lived in California of
Speaker 1: many years. I always, I must I must say I've
Speaker 1: enjoyed a lot of you know, California caps and and
Speaker 1: and peanuts. I'm back in Europe now, so I do
Speaker 1: love champagne too, So a little bit of everything as
Speaker 1: long as it has a good REVENE rating. Yeah, okay,
Speaker 1: fair enough, fair enough. Hey listen, I do you know,
Speaker 1: you sound really optimistic, and I don't blame you. You
Speaker 1: know you guys, are you know, on a growth spurt?
Speaker 1: What does kind of worry you as you look at
Speaker 1: the environment here? That is a good question, I think,
Speaker 1: you know, with this Corona thing going. Although I'm not
Speaker 1: worried about the habits we talked about earlier, I I
Speaker 1: can get a little bit worried about the recession or
Speaker 1: the economy being really really bad. Right. Usually we say
Speaker 1: alcohol is relatively recession proof, but you know, that where
Speaker 1: has been general not only for you know, but also
Speaker 1: for you know, society. All Right, Gonna leave it there,
Speaker 1: and that's fair enough. And I think that you know,
Speaker 1: you certainly mirror what we're hearing from some other folks.
Speaker 1: And CEO that we talked to, honey, thank you so much,
Speaker 1: really appreciate it, honey. Zachariah sin he is the founder
Speaker 1: of A Vino, joining us on the phone from Copenhagen
Speaker 1: and just talking about their their latest capital raise. Uh.
Speaker 1: And he's of course CEO of that company as well.