Subscription startup The Wine Gallery raises $2 million, after using the power of social media to increase its user base tenfold

It’s seen its customer-base increase tenfold over the past 18 months, but mail-order wine startup The Wine Gallery has now closed a $2 million capital raise to improve its tailored wine solution and to fuel further growth.

Launched in 2015 by co-founders Tom Walenkamp and sommelier Banjo Harris Plane, The Wine Gallery brought its tech-focused co-founder Humberto Moreira on board in April the next year.

The startup provides a personalised wine recommendation service, using a palate quiz, rating system and personal customer reviews to tailor wine deliveries to particular palates.

The $2 million raise is led by Conrad Yiu, co-founder of online retailer Temple and Webster, and also includes James Wakefield and Robin McGowan, co-founders of custom suits startup InStitchu, as well as some former employees of Australian wine giant Accolade Wines.

The Wine Gallery has also secured continuing support from investors who participated in its $500,000 seed round April 2017.

Since the seed raise, The Wine Gallery has increased its range of wines and invested in making the platform more user-friendly.

It’s also increased its user base to reach more than 10,000 paying customers and 4,000 monthly subscribers, Walenkamp tells StartupSmart.

Having started with just the three co-founders “packing a lot of boxes ourselves”, the startup has stayed pretty lean, he adds, with a team of 10 people now on board.

Sharing is caring

The growth in The Wine Gallery’s has come from “doubling down on customer experience”, Walenkamp says.

And a big part of that customer experience is in social media interaction. The majority of the startup’s customers are generated through word-of-month — or at least, through recommendations via social media.

“Instagram is by far the most influential social media platform for us,” he says.

The startup has more than 31,000 followers on the platform, and Walenkamp, who still manages the platform for the business, re-shares around five Instagram stories each day from customers “raving about the product experience”.

It’s not everything, but social media plays a big role in marketing to The Wine Gallery’s key demographic of 25- to 45-year-olds, Walenkamp says.

The startup strives to be an “approachable, fun, interactive, non-snobby wine business,” he says.

“We’re able to build a two-way dialogue with our customer base,” he adds.

This is especially important for The Wine Gallery’s subscription model, allowing the startup to work on “understanding [the customer’s] taste, listening to feedback, and using that to make better recommendations for them”, Walenkamp says.

People want a personally tailored service, and always have, but “previously it was reserved for the elite”, he adds.

The opportunity ahead

The latest funding is pegged to propel The Wine Gallery to the next level.

“We see the opportunity in front of us,” Walenkamp says.

“We’ve already built the best retail wine customer experience in the world — I see no reason why we can’t make it even better.”

The founders will be continuing to invest further in the startup’s range of wines, with plans to triple the tipples available, including more from overseas. The business is also moving to a new warehouse that’s seven times the size of its current space.

The startup will also invest in building its development team to continue improving the product and to “make the recommendation engine even stronger,” Walenkamp says.

These are changes that will be rolled out over the next 12 months or so, but the startup views its new funding as a means to accelerate growth, he adds.

“The biggest thing is not to need it. In the Australian market, especially for a consumer-based business, you can’t rely on external capital.”.

Any startup dealing with physical goods “has to be sound, surviving on its own, and raising capital to accelerate the journey rather than relying on it”, he adds.

NOW READ: How ticketing startup GiggedIn clocked up 10,000 Facebook Messenger members in a matter of months

NOW READ: “Thank f-ck that worked”: Vinomofo co-founder Justin Dry on how early failed ventures contributed to the wine startup’s success