Winc Plans $92 Million IPO to Expand Wine Business

Winc Plans $92 Million IPO to Expand Wine Business
Blending one of Winc’s core wine brands, Summer Water.

Santa Monica-based Winc Inc., which produces and distributes wine in the United States, has filed with the Securities and Exchange Commission to raise up to $92 million in an initial public offering.

The company was founded in 2011 and grew revenues for the first six months of 2021 by more than 20.4% compared with the same period in 2020, mainly due to the pandemic and workplace restrictions that kept people working out of their homes, according to the SEC filing.

Winc, which made its filing Oct. 13, plans to list on the New York Stock Exchange under the symbol WBEV. The company filed confidentially on July 2 and said it plans to offer 5.75 million shares priced between $14 and $16 a share.
Winc has had some financial challenges, however.

In 2020, it reported a loss of $7 million on revenue of $64.7 million, versus a loss of $8 million on revenue of $36.4 million in 2019.
In its 2021 third quarter, Winc estimates unaudited losses as high as $6 million on total revenue of $18.6 million, versus an actual loss of $1.3 million on revenue of $14.5 million in the same year-ago quarter.

The company has generated its revenue mainly from its five core wine brands, including Summer Water, Wonderful Wine Co., Lost Poet, Folly of the Beast, and Chop Shop.

Over the past two years, the company has grown by 80% in case volume sold, though, with the sale of more than 430,000 cases in 2020, the SEC filing states.  
The company reported about 120,000 members as of June 30 and a wholesale presence that serviced more than 7,700 retail accounts in 2020, the filing adds.

In June, Winc added to its portfolio.  
The distributor paid $13 million for Natural Merchants, an Oregon-based purveyor and importer of organic and biodynamic wines from Europe.

The SEC filing said Winc plans to grow organically and through more acquisitions — like the one with Natural Merchants — in the fragmented wine industry.
Winc’s goal is to continue to grow both the member base and expand its wholesale presence to at least 50,000 retail accounts in the next five years.

As of June 30, Winc had $2.4 million in cash, inventory of $22.3 million, and total liabilities of $27.2 million. About $6 million of its $7 million credit line has not been tapped, according to the filing.

The company expects its liquidity needs over the next year will be met by cash on hand and future debt or equity raises, as necessary, the filing states.

Winc is run by Geoffrey McFarlane, chief executive and co-founder of the decade-old company. Prior to Winc, the 38-year-old entrepreneur ran a Denver-based restaurant and hotel group, Pizza Republica and the Jet Hotel, with seven locations and more than 200 employees, from May 2004 until April 2012.
Brian Smith, Winc president and co-founder, joined the company in May 2018. Smith, 47, previously founded Jolie Folle, a millennial-f
ocused wine brand, which he sold in 2017.

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