Crushpad custom winery completes $3.5M financing round
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.
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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.