Boston-based Drizly used to be known as the on-demand delivery app for alcohol. More recently, the company evolved into a marketplace that helps brick-and-mortar liquor stores to connect with and sell to customers nearby through web and mobile commerce.
The Drizly app shows shoppers different prices on the beer, wine and liquor that they’re looking for at local shops, along with different delivery or pick-up options. As it matures, Drizly looks distinct from the on-demand delivery businesses it was once compared to, such as Instacart or Postmates. Now it’s more like travel metasearch sites like Kayak.com (owned now by the Priceline Group) or Tripadvisor.
A recent SEC filing shows that investors support Drizly’s strategic shift. They have added $2 million in venture funding to the company’s Series B round, which we reported on last summer. Polaris Partners led the Series B round in Drizly, which now totals $17 million. The extension brings the startup’s total venture capital raised to about $35 million.
According to co-founder and CEO Nick Rellas, Drizly is using this capital to build out new features and services, and to cover a greater number of US regional markets. Rellas said, “We’re starting to go into more suburban areas and even more rural areas where a store may not be able to offer delivery across longer distances. And while we’re offering in-store pickup as an option in some markets now, we’ll roll that out across the US soon.”
The company will also develop personalized recommendations for its users. Corporate customers who buy in bulk for holiday parties may be interested in a wide variety of on-trend alcoholic beverages, while wine enthusiasts may only want to see the best deals on bottles from their favorite vineyards. Drizly wants to keep them engaged while simplifying their search and shopping experience, Rellas said.
Liquor stores, beer and wine shops pay Drizly a monthly licensing fee to use its software and sell through its platform. The company sets prices so that they make sense for stores in each given market, taking into account things like how much customers typically spend on alcohol in the area, and how much it would cost a store to offer delivery as an option.
Industry research from 33entrepreneurs notes that a $17 million Series B round for Drizly puts the startup among the most well-funded companies in the world now involved in the digital sales of wine and spirits, primarily. Over the past 18 months, according to 33entrepreneurs’ PerCeval data, only the following companies have raised more in this segment of e-commerce: Jiuxian ($80 million), Yi Jiu Pi ($30 million), and Vivino ($25 million).
All of the pure-play alcohol sellers are facing competition from general food e-commerce companies that have started to sell beer, wine or liquor online. Some prominent examples are Deliveroo in London, and in the US services like Amazon Prime Now. Other alcohol-focused competitors to Drizly in the US include booze delivery apps like: Saucey, Minibar, Thirstie, Klink, and regional players Swill and BrewDrop.
In the US Rellas says Drizly has an early movers’ advantage. “We’ve spent four years building the infrastructure to be able to do this legally, and that’s something general retailers can’t just start tomorrow,” the CEO said.