Lot18, the Gilt Groupe for wine, wine accessories and gourmet food, has raised $30 million in Series C financing led by Accel Partners with existing investors New Enterprise Associates and FirstMark Capital participating. Accel partner Sameer Gandhi will join Lot18’s board of directors.
The members-only flash sales site launched a year ago to give consumers access to high-quality, curated wines, made available in small quantities and limited runs. Lot18 has since expanded to include wine and bar accessories (i.e. glasses, decanters), gourmet and artisanal foods, and even travel excursions.
Last month, the company launched Lot18 Experiences, which comprises wine- and gourmet-themed travel excursions, as well as local offers such as members-only wine-pairing dinners at Michelin-starred restaurants.
Since Lot18’s launch the site has grown from six to more than 80 employees and over 500,000 members, with high rates of repeat purchases among new and existing members. The company has seen 12 consecutive months of growth in gross merchandise volume, and facilitated the sales of more than 500,000 bottles of wine (I happen to be among these sales and am a fan of the site).
Having Gandhi on Lot18’s board should be extremely valuable to the e-commerce company. He previously backed Quidsi, the parent company of Diapers.com and Soap.com. which sold to Amazon for $555 million a year ago. He believes that there are a lot of parallels between Quidsi and Lot18’s potential.
The startup was founded by Philip James, who founded major wine site Snooth.com, and entrepreneur Kevin Fortuna, who was formerly the CEO of Quigo, an advertising technology company that was sold to AOL Time Warner for $360 million in November 2007.
The Series C funding comes in addition to a $3 million Series A round raised in November 2010, led by FirstMark Capital, and a $10 million Series B funding raised in May, led by New Enterprise Associates. The latter round included investment by Quidsi founders Marc Lore and Vinit Bharara.
The funds will support continued growth, as well as further technological and product development, particularly the expansion of Lot18 Gourmet and Experiences, the company’s food and travel verticals.
Of course, Lot18 isn’t the only flash sales site to sell wine and gourmet food. Virtually all the flash sales site sell wine and artisanal foods, including Gilt Groupe, One Kings Lane, and others. And Gilt just launched a dedicated food and wine vertical, Gilt Taste.
But what Lot18 has in its favor is the niche focus on wine and high-quality, curated foods, and that could help the site continue to be a credible source for good wine pics and deals. On many of the flash sales sites, it’s hard to tell whether I’m really getting a good deal on the wine if I don’t know the vineyard or label. The same way One Kings Lane has been able to carve out a successful, reputable business for home design and accessories, Lot18 could be the go-to, flash sales site for wine, accessories and more.
One Kings Lane has developed partnerships with celebs and well-known designers, got an endorsement from a Bravo reality TV show and more to help establish its brand. Lot18 could easily adopt a similar strategy.
