Crushpad custom winery completes $3.5M financing round

February 8, 2007 at 9:03 am 2 comments

crushpad.jpg

Crushpad, a custom wine-making company that helps wine lovers and professionals make boutique wines, said Wednesday that it’s finalized $3.5 million in equity and debt financing to help it roughly double production this year.

Click image for more details

wine2.JPG

Customers — who include wine enthusiasts, professional winemakers, wine retailers and restaurateurs — can make small batches of wines or significantly larger quantities using grapes from some of the state’s high-end vineyards, such as Amber Ridge Vineyard in the Russian River area, Anderson Valley’s Hein Vineyard, Napa Valley’s ToKalon Vineyard, and Mendocino’s Eaglepoint Ranch, according Crushpad’s web site. It now has about 1,500 members in 35 states and six countries. The new financing will enable San Francisco-based Crushpad to expand this year’s production to between 25,000 and 30,000 cases, and dramatically expand its social networking site — crushnet.com — officials said Feb. 7, setting the stage “for national expansion into new urban locations.”

Noah Dorrance, Crushpad’s marketing director, told the San Francisco Business Times that more than half of its current customers live outside the Bay Area, and many fly in or link up electronically to keep tabs on their wine’s progress. “We’re in talks in a number of different markets, both nationally and internationally” to expand into new geographic regions within the next year or so, he said, but declined to be more specific. Professional investors and Crushpad customers provided equity financing of $2.7 million, augmented by a line of credit provided by City National Bank.

In mid-December, Crushpad said its customers produced 15,000 cases of luxury wines from almost 300 tons of grapes last year, creating more than 400 distinct wines. Roughly half of that volume came through Crushpad Commerce, a service that allows customers to start and sell their own commercial brands.

Crushpad is positioning itself as a player in the new wave of so-called “social production” companies where consumers help define and create the end product, and clearly aims to be thought of as the YouTube or MySpace of luxury wine production. “Crushpad clients define the wine style, participate as much or as little as they want and end up with barrel-size lots of luxury-class wine made to their specification,” officials said in the statement. The company was founded three years ago by wine industry veterans and “technology refugees,” according to Wednesday’s statement. For example, Kian Tavakoli, Crushpad’s lead winemaker, has been a winemaker for luxury wine Opus One and Clos Du Val Wine Co.

The typical cost at Crushpad to produce a barrel of wine, or about 25 cases, ranges from $4,500 to $9,600, which translates into $15 to $32 per bottle. Some customers use its San Francisco warehouse-style facility to make and sell wine for commercial purposes, and the company helps them to produce as few as 50 cases and as many as thousands. Some users participate in making their wine over the Internet, using Crushpad’s interactive webcams and help from its crushnet.com “online community.”

“Over the past three years we’ve had the privilege of working with thousands of people to pursue their dream of making wine. This financing will allow us to fulfill that dream for many more as we begin entering new markets,” Michael Brill, Crushpad’s founder and CEO, said in the Feb. 7 statement.

San Francisco Business Times by Chris Rauber

About these ads

Entry filed under: crushpad, financing, funding, News, online business, startup, venture capital, wine, winery. Tags: .

Two flaws found in Firefox Yahoo wants more mashups

2 Comments Add your own

  • 1. Darin Perunovich  |  November 1, 2007 at 3:35 pm

    I am an account Executive in the mortgage industry. If you would consider me for any positions open I would greatly appreciate it. I have been trying to get in the wine business and I am not sure were to start(I am looking at a Wine Bar/Market/Tastings). Thanks you for any help you can give me and ching ching.

    Best Regards
    Darin perunovich

    Reply
  • 2. rayray7  |  November 18, 2007 at 5:31 pm

    What a great resource for the true wine collector. This is a good way for someone to get into the wine business with minor outlay of capital. Please when you have time checkout my blog http://www.winesandbenefits.com for fsacinating articles on wine gifts,red wines and ways to sell private label wines

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


New TechAddress Launched!


Follow

Get every new post delivered to your Inbox.

%d bloggers like this: