Superstar winemaker Jean Philippe Moulin developed prestige champagnes for brands like Barons de Rothschild and LVMH’s Ruinart but always dreamed of creating a line of bubbly under his own name. Last year, U.K.-based Naked Wines made that possible, providing €500,000 in advance funding through its 250,000 wine-loving customer-investors, who were able to buy Moulin’s four champagnes at a discount, Bloomberg Markets reports in its May issue.
When South African Rowan Gormley founded online retailer Naked Wines at the end of 2008, wine crowdfunding didn’t exist. Yet the company’s reward-based structure has been so successful that by 2012, it had expanded into Australia and the U.S. “In 2015,” Gormley says, “Naked plans to invest £70 million in 145 vintners in 13 countries.”
Naked Wines’ investors, called angels, commit to a monthly fee of £20 (or $40 in the U.S. and A$40 in Australia) against future purchases of wine offered at lower prices. The pool of money is funneled to talented winemakers like Moulin who need capital to start up their own brand or expand. Most of Naked Wines’ 600-odd offerings are exclusives for angels. The U.K. has the widest selection; so far, choices in the U.S. and Australia are mostly limited to wines made in those countries.
In all three locations, there are waiting lists to become an investor. As added benefits, angels get to chat with winemakers and post their own reviews for all to see.
“Recently, the average spend per bottle has gone up,” says Gormley. “We have more adventurous wine enthusiasts who will pay for higher quality.” That’s translated into more name-brand vintners, like Moulin and another recent signer-on, New Zealander Rod Easthope, the former winemaker at Craggy Range who makes brilliant sauvignon blanc.
But Naked’s is only one model. In the past year, even large and well-established wineries have turned to equity crowdfunding platforms to get cash for renovation and other projects, gaining social media traction in the process.
In September, England’s largest wine estate, Chapel Down, raised almost £4 million ($6 million) to acquire more vineyards and build a winery through website Seedrs. Burgundy’s Domaine Chanzy went the same route to line up more than £1 million. And basketball star Yao Ming took to Crowdfunder to offer fans shares in his Napa Valley–based Yao Family Wines for $5,000 and up. Those who invest the most—he’s looking for $3 million in total—will be entitled to perks such as a VIP winemaker dinner and an invitation to the grand opening of the winery’s tasting room in Shanghai.
This story appears in the May 2015 issue of Bloomberg Markets.