Thanksgiving Eve
It's 6pm on Thanksgiving Eve, and here's the view from my desk out across the office. We're busy, we're in the final ramp up to the three biggest food and wine days of the year: Thanksgiving, Christmas and New Year and we're still working.
I'm not from here, and my family all still live back in the UK. Thanksgiving has never been a special day for me, but I know its one of the biggest US holidays. I'm humbled by the dedication the entire team has shown again and again, putting our members and producers interests before their own every time. Our employees care about what they do, and this is just another reminder of how proud I am to be a part of Lot18.
Expanding the Office
Lot18 started in a Starbucks (there were 2 of us back then), from there we graduated to a cube rented from Snooth (6 people), pretty soon it was 2 cubes and a satellite office for the dev team and myself - generously loaned by Ziff Davis (that saw us to 20). After that, and having reached 25 people, we moved to our first proper office.
A whopping 8,000 square feet on East 32nd St in Manhattan. That was in March. Now with nearly 90 people that averages out to less than 100 square feet per person and its become untenable.
Last night we formally broke through the wall to the rest of the floor, which we've just signed. That takes us to around 16,000 square feet. We'll see how long that lasts.
Samwoo E breaking the seal
Josh Mohrer saving money by doing his own demolition
Convergence
Perils of dust
Part of the new space with a better dust barrier in place
The other half of the new space
Responsibility
Yesterday we announced (here and here) that Lot18 raised a Series C financing of $30m. This is the third round of capital we've raised in 12 months, and it brings the total we have raised to nearly $50m.
We're incredibly excited by what we've been able to offer so far and this additional funding will allow us to double down in our core areas: wine, gourmet, and experiences. We work very hard to take these complicated industries and present the best they have to offer to the consumer in a simple and enjoyable way. Providing access to the best in food and wine is our mission, and you'll not see us stray outside of that.
One thing that does not go unnoticed by us (I talked about it when we raised our $10m Series B) is that the last time companies in the wine space raised this much money it was the 90's and it was a disaster. Hundreds of millions of dollars were poured into companies including Wine.com, Virtual Vineyards and Wine Shopper. These coalesced into Wine.com and New Vine Logistics, the former announced its first profitable quarter this year (after 10+ years in business) and the latter went bankrupt last year.
In every single meeting we've ever had with a VC we've been asked "Why will you be different?". Our answer is simple: the laws are different now, and as Snooth nears 1M registered users we proved it was possible to build a wine community online.
These prior failed investments cast a pall over the industry, companies couldn't raise money and tech innovation was stifled over the first decade of this millenium - many VCs won't go near the category, even now. Like music after Napster, wine had a stigma. However, today, a decade later, just as Spotify is doing with music, we're trying to tell the same story a different way.
The food and wine industries are massive, but the road is littered with corpses, and we're acutely aware that there's a heavy burden on our shoulders now, as if we fail, funding for future companies will likely dry up for much of next decade. We take our role in this seriously.
Clarifying things
The governing body for California's wine industry (the Alcohol and Beverage Commission / ABC) released a seismic document today. In it they clearly defined how third parties could work with wineries to help them sell their wines. The advisory is here and the press release here.
Lot18 was quick off the mark, emailing our trade partners here, and putting out a press release within 90 minutes of the original release.
It's pretty deep technical stuff that the advisory covers, but its effect will be felt by everybody. A lot of companies are going to be scrambling to rebuild their systems to be compliant, but I'm glad to say that Lot18 invested from the start in a system that accounted for these requirements and then some, and we're happy to report that there is no interruption in service.
The net outcome of this will be that a larger variety of wines will be available online (including via Lot18), and that's good for everyone.
Here's additional coverage: