A few years ago, the frothiest market in tech was arguably startups selling subscriptions to boxes of curated goods, such as clothing, beauty products, and food, which would arrive on customers’ doorsteps each month.
The buzz around this area of e-commerce may have subsided a bit, but there are still a ton of box subscription startups plugging away. One of them, five-year-old Bright Cellars, apparently has amassed enough traction to score a fresh round of venture funding. The Milwaukee-based startup, which ships customers four bottles of wine each month based on taste preferences imbibers have shared with the company, said this week it closed an $8.5 million Series A round led by Revolution Ventures, with earlier Bright Cellars backer CSA Partners also contributing.
Revolution is the Washington, D.C.-based venture firm led by AOL co-founder Steve Case. Case is perhaps the most prominent among the tech investors trumpeting the potential of the Midwest and other regions outside of Silicon Valley to lead the next era of U.S. innovation. In addition to Revolution’s early-stage venture fund (the one that backed Bright Cellars) and a later-stage fund, the firm also operates “Rise of the Rest,” a seed fund that backs very young startups based outside of the Bay Area, New York, and Boston.
“Revolution invests in high-growth startups outside of established startup ecosystems, making them an ideal partner for Bright Cellars,” Bright Cellars co-founder and CEO Richard Yau said in a prepared statement. “The firm’s deep expertise in the e-commerce and consumer space will guide us into the next stage of growth.”
MIT grads Yau and Joe Laurendi started Bright Cellars in the Boston area in 2014. The following year, they participated in a startup accelerator program in Madison, WI, run by Gener8tor. Early investments from Gener8tor and Milwaukee-based CSA Partners, as well as the lower business costs and cost of living, spurred Bright Cellars to move the company to Wisconsin permanently.
Since then, Bright Cellars says it has grown to more than 40 employees and increased its sales rapidly. It charges $88 per box. (The privately held company doesn’t share specific financial results.)
Bright Cellars’s growth and the new funding round are notable in the context of Milwaukee’s startup scene, which isn’t known for consumer tech ventures. Other local startups in that category include Wantable, a business with nearly 200 employees that sells curated boxes of clothing and fitness apparel, primarily to women.
Bright Cellars customers take an online quiz to determine their taste in wines, and the company’s algorithms use that information to make personalized wine recommendations. The company also takes into consideration customers’ reviews of the wines shipped to them to enhance its recommendations, Bright Cellars says.
The wine box subscription space is a crowded one. Startups including Los Angeles-based Winc, which charges $48 for three bottles, offer a similar service. Others have put their own twist on the wine subscription model: Vinebox, based in San Francisco, sells quarterly boxes that start at $72 for a nine-“glass” flight (10-centiliter pours) of organic wines; subscribers get credit toward purchases of bottles of their favorites.
And, of course, many wineries and wine shops have long offered periodic shipments.
In a press release, Bright Cellars says it plans to use its new funding to hire more experts in data science and artificial intelligence technologies, as well as expand its operations to serve more customers.