Only this August, wine retailer NakedWines, the customer-funded online wine retailer, announced it had raised $10 million in a third round of investment from a German group of direct wine-selling companies and founder shareholders. The money will be used to expand in the U.S. and Australia from its UK base. Now it’s launching of a new bond for retail investors, The Naked Fine Wine Bond. There have been a few corporate bonds of this type (hotel chocolate, John Lewis and the Jockey club) but not a wine bond so far.
The company intends to raise £3 million through the bond. The minimum subscription level will be £1 million and the maximum £5 million. The funds will be invested in independent winemakers over a minimum of three years. Naked Wines says this will allow for the financing of new wines in the next stage of the development and, and of course, grow the Naked Wines Group.
Based in Norwich, England, NakedWines.com’s business model allows customers to sponsor independent winemakers in return for about 25% to 50% off a wine’s retail price and exclusive promotions. The site currently has 150,000 Angels (customers who fund winemakers) who have invested over $40 million in 130 winemakers around the world and ships over 10 million bottles of wine each year.
Customers subscribe £20 a month to its service to provide the funds to invest in winemakers, in return for lower prices. Earlier this year it announced an annual operating profit of over £1 million following a 57% rise in sales to £34.9 million.
Rowan Gormley, Naked Wines’ Founder and and CEO says fine wines “require more time to mature, meaning we also need a longer-term source of funding in order to give the winemakers the financial assistance they need. Doing it this way means the winemakers can focus on what we want them to do – make great wines – rather than spend their time and money selling. Meanwhile investors in the Fine Wine Bond will benefit from an attractive rate of interest along with the opportunity to acquire a premium product competitively priced.”