The boss of a much-hyped e-commerce platform has labeled wine tech “a graveyard of failure” as the business fails to secure enough funding for the third round.
The CEO of e-commerce start-up Pix, which promised to revolutionize online wine sales, announced last week that he has been forced to lay off most of his staff.
The Napa-based project, whose investors are said to comprise a “who’s who of the wine industry”, is now operating “on a ghost team” and founder Paul Mabray has revealed he is looking for a buyer for the business, which in six months generated US$600,000 in annual recurring revenue.
While Mabray makes much of the wine industry alumni he managed to bring on board for Pix, he refuses to name the “angel investors”, and their contributions were not enough to keep the project afloat.
As reported in The San Francisco ChronicleMabray, who cut his cloth at e-commerce site Wine Direct, met with more than 80 venture capital and private equity firms to raise the cash needed for a third seed round for the business this summer, but could not secure the dough.
“I think the wine industry has a stain against it in the VC community,” Mabray told the newspaper.
The idea behind Pix was not to sell wine from the platform, but rather to redirect consumers looking for specific wines to the places that have those bottles in stock. The Pix database currently includes around 2.4 million wine products from 2,800 wine sellers who have integrated their inventories with Pix; an effort the CEO described as a “herculean task”.
Wineries and importers also paid Pix a fee to “clean up” their own wine inventory online. The company also planned to make money through keyword bidding, which allows businesses to pay to show up higher in search results.
“Wine tech is a graveyard of failure. Hopefully we don’t end up in that,” Mabray told The San Francisco Chronicle. “It’s a hard market to define. It has had endless failures and mediocre successes.”
He revealed that while he is selling the company, he would like to remain as CEO. If a buyer cannot be found, Mabray has said he would consider selling Pix’s intellectual property.