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North Bay Business Journal

Thursday, August 22, 2013, 5:45 pm

Naked Wines gets $10M new investment

Sales topped $50M in 2012

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    Naked WinesNAPA — Naked Wines, which combines crowdfunding with a wine club to back up-and-coming independent winemakers and offer their brands at a discount to investors, on Thursday said it received $10 million more in funding, which the company said will be used to expand sales in the U.S. and Australia.

    Ken Deis

    Ken Deis, a winemaker with 37 years of experience with notable North Coast brands, is one of the independent producers at Naked Wines’ new winery in Sonoma Valley. (credit: Naked Wines)

    The 5-year-old United Kingdom-based company closed a third round of funding, received as a long-term shareholder loan from WIV Wein International AG, a large Germany-based seller of wine directly to consumers.

    “We’ve been in the wine business for 60 years, in 24 countries around the world, and NakedWines.com’s business model is the biggest revolution we have seen,” said Andreas Pieroth, joint managing director of WIV Wein, in a statement, referring to the U.S. arm of Naked Wines.

    In the Naked Wine’s business model, consumer-investors, called “angels” after angel investors, chip in money to an escrow account for their favorite participating winemaker. Those investors then get to buy wine from their beneficiary winemaker at wholesale-like prices, typically 40 percent to 60 percent below retail prices. Unlike many wine clubs, the “angels” don’t get regular shipments.

    Rowan Gormley, the brainchild of what became the Virgin Wines club, and a dozen others involved in that venture launched Naked Wines in the U.K. in 2008. The company put down roots in Napa Valley last year and leased the former Blackstone Winery in Sonoma Valley to produce wine.

    So far the company said it has attracted 150,000 consumer-investors, who have invested more than $40 million in 130 winemakers around the world.

    One such free-vintner is Ken Deis, former Winemaker at Flora Springs.

    “The only reason I can make my own wines, under my own name, without having to spend my life on the road selling, is because Nakedwines.com does all that for me,” he said in a statement.

    The company funds grape, barrel and bottle and other purchasing, winemaking, bottling and marketing. Unlike traditional angel investment, Naked Wines doesn’t charge winemakers interest on funding or take equity stakes.

    Naked Wines (800-673-4718, nakedwines.com) ships more than 10 million bottles a year, and sales topped $50 million in 2012.

    That was good enough to push the company into the black for the first time, declaring a £1 million ($1.2 million) profit and distributing it to employees.

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