Vivino Founder on Wine App Startup

sales during the pandemic, more than doubling. So here to talk more about what they are doing is Heiny Zacharias, and he is CEO and founder of the wine apps startup Pavino. He's on the phone from Copenhagen and full disclosure, I love great red wine and I use the Vivino app. In fact was using it over the weekend. UM, honey, nice to have you here. Welcome or welcome back. Thank

you very much, very glad to be here. So first of all, I want to talk about the capital raise, but I really also want to find out what this year has been like. UM. For you take me back to kind of last March in April and the pandemic. What was going on in your business, what was going on with your employees, what were you seeing in terms of consumer trends. Yeah, it was a little bit of a crazy time honestly because we we didn't know what was going to happen, right, so we had we have

people in Hong Kong too, they had seen something. But once it hit the US, we're talking mid marchers, so we actually started by sort of pupping the brake a little bit and say, Okay, what's this gonna be, what's this gonna look like, what's gonna happen to our sales? But we pretty quickly saw that it was gonna move us sillswise in the right direction. So so things when we had twenty of the March, things just jumped, you know, revenue just went way way up there in the beginning.

We also had a little bit problems with you know, customers support and supply and so on, so that took us a month or two to really get back up to speed. But like a crazy time for us, and and you know it was it was rough, but but numbers were good. Yeah, but so pretty quickly March that all of a sudden, um, you know, and has it been pretty consistent in terms of growth or have you seen a steady increase from month to month. It was.

It really jumped for for two or three months and like totally crazy, right, and we may be in the beginning thought, okay, what is this is just like a short term thing. People want to make sure they have winers. So but then stabilized at a certain level and and it's been really really good ever since that, you know, just more buyers converting and and just higher numbers all over. And even when Europe sort of opened up over the summer, we didn't see numbers really go down again. So we

just landed at a new level. Well, that's what I want to ask you, and I'm sure listen, honey, that a lot of people are asking you, and we all wonder that, Okay, there are these trends. Whether you're a peloton, whether you're you know, what have you? You know, do what we've seen over the last year because of the pandemic and we were forced to predominantly be in our homes, work from our homes, living our homes. Do do those

trains trends stay with us? What indications do you have that the growth that you've seen that you hold on to it and it continues to stay with you As the world start it's to reopen. Yeah, it's a good question, right. I think first we can say for certain like wine is probably not a fan, right, it's probably gonna stay with it. That in my world, so so they're probably

gonna keep buying wine. But what our theory and what we we we've seen so far, especially when you're opened again, is that, you know, it's really really hard to get people to change habits. But if you have something that is more convenient and easier and so um, you know, they don't go back. Like like we buy most of our supermarket stuff online now miss me personally, and I would never go back, Like, once I've seen it work, I'm just not going back. And the same goes for

something like Amazon. Right, there's a reason why we do it because once we start doing it's it's incredibly convenient and and the same goes for for buying wine online. Well, and I'm curious about your demographic. Who do you have a typical user, and if so, describe who they are and what kind of buying do you typically see from them. So so we we have to demillion users around the world, so it's really really difficult for us to to say

what a typical user is um. Previously, I would say, pre pandemic, it was people that were a little bit more into wine, not like not the high end user, more the the higher end of the casual drinkers. But now I think it's changed, Like we we see everybody doing it now. We also see price points moving down. That doesn't mean people dry, people buy a wine that's less expensive. It just means that we're taking more from the offline part and people are starting to buy less

expensive wines online now too. Full disclosure. I love the you know app. I use it. I think what's really cool about it um Honey, to be quite honest, is I can be anywhere and if I have someone, I can quick take a picture, I quick get some views, I can buy it. Like it's just wonderful and it's so easy. I do wonder too, like how sticky is it? Once you've got somebody who's on the platform, do they automatically become a buyer a shopper? Do they continue to

increase it? Like? How does it? How does it play out? It varies quite a bit. It is obviously the app, so you do lose a lot of people in the beginning, but once people start going right after people have used it for you one year, it just doesn't change like once their own board have used it for one year. That feels like it's a lifetime. We've been around for ten years now so we have pretty good data on that, so so the people that really appealed to and they

just keep going, so so that's amazing. Obviously we built new features all the time and so on to make it better and better. Is the US your best market? Your fastest growing? Or where is it? US is by far our biggest market commercially around Our sales are in the US, so by far the biggest, not the fastest growing, I mean relative to to the market, it's by far the biggest. But but some other markets have started late.

This might be a strange, but actually France started relatively late. Really, it took them a while, took scept us like we're not French show, so they wouldn't accept us. But now they love us so so we're happy with them now. Well, so what are you gonna do with the money hundred million that you guys have raised? How do you need to spend it? And I am always curious for an app like yours, what's your most expensive you know when you go through the balanty, is it the people, is

it marketing? What's the most expensive item line item. Yeah, we're very privileged in the way that we spend very little money on marketing historically, right because we have twenty thousand people that installed up every single day organically. So that's a privilege when it comes to that that might change in the future, just we we have a little bit more cash now, but but for us, it's all

about helping people drink better wine. So number one on our list is really operating product and engineering just to make the product even better, and a lot of that is about using machine learning and AI to really learn every single use. So you know, we know all these wines. We have twelve million wines on there, and then we have these fifty million research and one thing is giving them ratings. But we want to give them personal ratings,

just like Netflix does. So we're launching something called match for you. So once once she was scand of wine, you're not just gonna see the ratings, also going to say, you know it's eight nine and certainly chindibl like this wine, so that we're very excited about it. That's really interesting. That's really clever. Where are the areas in the world that you're not yet in terms of geography that you want to be, that you need to be. Yeah, I

think Asia has been a slower region for us. Usually starts with the real wine lovers that start using it, and then it's slow. Then it spreads after that, but there's no doubt about like North America and even South America and Europe our strongest places, Asia is lagging a little bit after but we're starting to grow there now. So yeah, no interesting, Um, and I'm also curious. So I think I was just looking at some of the

numbers and at least some of our reporting. This recent funding round million values you you guys between six and eight hundred million. Does that feel about right? That's a good question. We have some bloom Brig analysts estimate that, and I'm not kind of coming in further. Okay, fair enough, fair enough, Maybe over a glass of wine we can talk about it. Sometimes it's gonna take a lot of wine. Okay,

that's fair a lot of good wine. Um, you're not profitable yet, right, and probably not this year nor next. Why if it's doing so well and you guys are adding you know, I'm just curious. Actually, we were profitable, so we so we did bring even as soon as this hit, we broke even, and I honestly I think that's also why we managed to really raise a lot of money. People say, wow, this business really really works.

The unigonomics are Charlotte. The growth is there. Let's put some real money on this and see if we can grow it even faster. Show. So we've really shown that the business model of the Unigonomics are strong and that profitability continues this year, next year. There's your pretty confident of that. We're not Yeah, no, we're not planning to do that because now we really want to invest right. So so we've managed to show that, you know, it all works, but now we're going to invest a lot

more fuel the growth. Got it? Got it? And so what's the endgame for you guys? Do you plan to I know, and I know you probably get asked these questions a million times, but I have to ask you, um, what is the endgame? Go it alone? Continue to grow the business. You've just gotten another capital raised. There's a lot of money out there. There's also a pretty healthy I p O market, you know, and it's been yeah, exactly. So how do you want to do it? I think

it's a good question. I think my answer has always been and and and you know, we're closer to something now obviously, but really build a sustainable business, also a business that could stand alone. Right when you think about the wine market being like almost like four hundred billion dollars, If we get a slice of that, this could be a really big sustainable business. So you know, I think, you know, someone might be interesting acquiring us, but I think I p O is something I really like at

some point too well. And it sounds like, you know, honey, from what you told me, is now that you've got this money, but you said you did break even. You've shown kind of the world that we can do this. Um, so you've got some more money that you mentioned you want to put into upgrading your product engineering and so on. Is that what you need ideally to kind of move the platform in the business to the next level because

you've got a lot of users. Yeah, yeah, yeah. But I think it's also about like the thing about we are a global business, right, we are actually in seventeen markets. The marketplace open in seventeen markets, right, We're only two hundred people. So we really want to go a little bit deeper into each market there and increase our our our foot our footprint in each single, each single market there. So I think that's very important for us. All right,

So before we go, what's your favorite rhine? Our favorite few wines? That's you know, I've lived in California of many years. I always, I must I must say I've enjoyed a lot of you know, California caps and and and peanuts. I'm back in Europe now, so I do love champagne too, So a little bit of everything as long as it has a good REVENE rating. Yeah, okay, fair enough, fair enough. Hey listen, I do you know,

you sound really optimistic, and I don't blame you. You know you guys, are you know, on a growth spurt? What does kind of worry you as you look at the environment here? That is a good question, I think, you know, with this Corona thing going. Although I'm not worried about the habits we talked about earlier, I I can get a little bit worried about the recession or

the economy being really really bad. Right. Usually we say alcohol is relatively recession proof, but you know, that where has been general not only for you know, but also for you know, society. All Right, Gonna leave it there, and that's fair enough. And I think that you know, you certainly mirror what we're hearing from some other folks. And CEO that we talked to, honey, thank you so much,

really appreciate it, honey. Zachariah sin he is the founder of A Vino, joining us on the phone from Copenhagen and just talking about their their latest capital raise. Uh. And he's of course CEO of that company as well.