TECHNOLOGY

How One App Built a Community of 24 Million Wine Drinkers (and Raised $37 Million in Venture Capital)

Find out how Vivino created an engaged community platform that helped grow their startup and get investors’ attention.

Share on
BY Kaleigh Moore - 01 Jul 2017
A thriving online community has helped wine app Vivino grow its audience.

 

PHOTO CREDIT: Getty Images

Seven years ago, Heini Zachariassen wanted to create an online wine community that would simplify the wine selection process. At the time, the complexity of choosing a new wine was overwhelming for the average shopper--so he wanted to create a space in which wine drinkers could share recommendations and ratings, much in the same way other platforms like Amazon were leveraging community-sourced recommendations.

But getting buy-in for this idea from investors was not as easy as he'd hoped in the early days. When he began pitching the idea to investors and wine industry insiders, he was challenged on the approach and told he should engage with experts, retailers, and wineries--perhaps even on a specific wine style or region. Tackling such a massive niche seemed an insurmountable challenge--and it went against the traditional approach within the industry.

"Anyone who works in the wine industry will tell you it is an industry full of passion, and with passion comes the desire to protect. And while technology has brought benefits to the wine industry, people within the wine industry were cautious. Industry insiders struggled to see us as anything more than a piece of tech," Zacharaiassen said.

The status quo and business as usual wasn't Zacahariassen's goal, so he continued to push ahead. Instead of pursuing the wine industry, he next began connecting with investors in the tech and business sectors--and eventually landed $25 million in Series B funding from Neptune Investments--whose leader is Christophe Navarre, the CEO of Mot Hennessy. This investment was a major turning point for the startup, as the association with the industry giant added authority points within the world of wine.

Vivino originally debuted in the App Store with a competitive model: Users were encouraged to scan wine labels in exchange for points. However, this system didn't take off. Learning along the way, Zacharaissen and his team also tested thumbs up and thumbs down ratings and finally found their sweet spot with a five-star review system, as indicated by feedback. From there, the community platform began growing quickly: 1 million users in 2013, 5 million users in 2014, 10 million in 2015, 13 million in 2016. Today, Vivino has more than 24 million users scanning more than 500,000 wines per day.

Competitors like Delectable and Wine.com have are often mentioned in the same wine commerce space, but Vivino's numbers indicate they are as much as 50 times larger than their closest app competitor--likely due in part to their community platform that sits at the center of their business model and drives growth.

While Vivino continues to dominate in the wine app space, it's still experiencing growing pains. They're now in a period of transition in which they're asking community members to see them as a marketplace and to entrust them with their dollars--and the community resource remains at the center of the strategy for this.

"Our goal is to help users trust that no matter how much money they spend with us on wine, it is money well spent. Consider the similar shifts in companies such as TripAdvisor and Google - where you ask your users to stay with you as your change and evolve your business model," Zacharaissen said. "TripAdvisor started out as a travel review site and now they're selling experiences. Google began as a simple search bar and then implemented ad platforms. Asking consumers to change their pre-established mindsets is a huge challenge, but one we excited to take on."

inc-logo Join Our Newsletter!
The news all entrepreneurs need to know now.

READ MORE

3 Big Changes Are Coming to Content Marketing. Here’s How to Be Ready

Read Next

Bill Gates Just Said He Regrets This 1 Thing (And What We Can Learn From His Regret)

Read Next