Alcohol E-Commerce Boom Drives Investment Buzz

Online Alcohol Sales Poised to Surge

Online liquor sales surged during the pandemic as shutdowns meant consumers were unable to buy liquor at stores, restaurants, and bars. Many investors believe that online alcohol sales are poised for continued growth even after the pandemic subsides. As a result, the sector has seen several major acquisitions, venture investments, and IPOs recently. Venture capital funding for alcohol ecommerce startups in 2021 is already closing in on the total for all of 2020.

According to a recent study, in 2024, global online alcohol sales are expected to surpass $40 billion. That’s up from $5.6 billion in 2020.

Deals Abound in Q1

During the first quarter of the year, investors have rushed to gain a piece of the alcohol ecommerce market. On the mergers and acquisitions front, Uber (UBER) inked a deal to acquire Drizly. The rideshare giant is paying $1.1 billion for the alcohol delivery startup.

Meanwhile, Vivino, the mobile wine app which gives users recommendations and sells bottles online, secured $155 million in venture funding. The round was led by Kinnevik AB and Sprints Capital and included participation from GP BullHound and Creandum.

Gopuff, the delivery service which recently acquired BevMo, the alcohol seller, raised $1.15 billion in venture funding. The Series G round was led by D1 Capital Partners and Fidelity Management and Research. On the IPO front, Vintage Wine Estates announced it will tap the public markets by merging with a SPAC called Bespoke Capital Acquisition Corp. (BSPE)

Some Investors Remain Wary

Despite interest in alcohol ecommerce startups, some investors are choosing to stay on the sidelines until it becomes clear how and if consumer habits will change after the pandemic. “We don’t want to pay a higher valuation because someone did well in COVID,” said Catharine Dockery, a founding partner at Vice Ventures.

The companies which inked deals early in 2021 saw their valuations and demand for their services surge during the pandemic. Though online alcohol sales are expected to boom in the coming years, there will likely still be unexpected twists and turns for the industry as consumers begin to transition out of the pandemic.

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