Imagine having the ability to store up to 500 bottles of wine without taking up any more space in your kitchen. San Francisco-based company Underground Cellar allows you to do just that with its “CloudCellar” platform.
Underground provides its members with the ability to buy and store massive amounts of vino in its 33,000-square-foot facility in Napa Valley. For any last-minute special occasions, the company provides members with free next-day shipping.
“CloudCellar was one of the original concepts I had when I founded [the company], and what we’re seeing is it unlocks so much potential,” Jeffrey Shaw, CEO of Underground Cellar, said in an interview with Built In. “What it unlocks is not just people buying wine so they can have it with dinner tonight, it unlocks this mindset that you are now a wine collector.”
On Tuesday, the digital wine marketplace announced that it raised $12.5 million to continue its mission to revolutionize the wine industry. The Series A, led by Accomplice, will go toward helping the company triple the size of its team by the end of the year.
The company offers up more than just boozy storage space though. Underground Cellar’s subscription-based platform leverages its proprietary AI to provide customers with bottle upgrades worth at least the same or more than they paid.
Each week the company posts member offers to its website. The offers consist of a few similar wines packaged together that usually take on a theme, like Napa Valley Cabernets for example. These collections feature bottles as cheap as $30 with the potential to be upgraded to a bottle worth up to $10,000.
“With Underground Cellar I said, ‘Hey, let’s take a step back and reimagine how wine commerce should ideally work,’” Shaw said. “What we learned is that we can drive demand for these wines, not by having the lowest price, but by curating the wine and giving people an opportunity to try bottles that they wouldn't otherwise be able to try.”
Shaw likens the platform’s experience to one of his favorite childhood pastimes, collecting sports cards.
“I remember, I opened up the pack, and there was this Charles Barkley holographic rookie card in there and I liked that feeling of getting like this really rare card in this much larger pack. It just stuck with me,” Shaw said.
Underground will use the additional capital to rapidly hire for its team as the company continues to expand. The hiring spree is set to take place across departments, from the Napa Valley warehouse to the company’s corporate office.
“We see that we are going to 4 to 5x our sales again by the end of the year. That’s some very aggressive growth and we need the right team in place to support that,” Shaw continued.
In addition to the funding news, the company announced that former Google executive Jeff Hardy will join its C-suite as chief operating officer.
“We’re so excited for the future, because we’re only just scratching the surface,” Shaw said. “One of the things we’re really excited to do is democratize access to the best wines in the world for everybody.”
Prior to the Series A, Underground Cellar raised $6 million in equity, bringing its total equity raised to $14 million. All told, the company has raised $18.5 million in venture capital financing to date, including debt.
Additional investors Golden Ventures and Bling Capital participated in the round, among others.