Online beverage supplier Digital Wine Ventures (ASX: DW8) is seeking to raise up to $1.6 million via a rights issue and private placement.
Subject to shareholder approval, management and the board have committed to take up to $225,000 at the same terms.
The company has also secured a cornerstone investor for $250,000 according to broker Peak Asset Management.
According to the company, the funds will be used to scale its unique cloud-based wine distribution business, WINEDEPOT, to take advantage of the emerging online and direct-to-consumer markets.
Funds will also be used to engage additional resources and develop its marketing and sales pipeline in Australia and across international markets.
Today’s news follows the company’s announcement earlier this week that it had signed on Casella Family Brands, owner of iconic brand [yellow tail] and other Australian wines, as a foundation customer of the distribution service.
What is WINEDEPOT?
WINEDEPOT is a cloud-based technology platform that provides Australia’s $40 billion wine industry with an end-to-end supply chain solution by providing wine producers the ability to hold inventory reserves in a network of ‘depots’ located in the major capitals.
Digital Wine claims it is quicker, cheaper and simpler than current options, by dramatically reducing delivery times, freight costs and the risk of breakages.
In July, the company secured a partnership with Australia Post to build its first four depots within existing Australia Post distribution centres in Sydney, Melbourne, Brisbane and Perth.
Later that month, it clinched a deal with privately-owned Wine Storage and Logistics to establish a large depot in Adelaide.
These deals have enabled Digital Wine to establish a national presence very quickly, without any significant capital expenditure.
The company’s recent onboarding of Australia’s largest family-owned winery, Casella, along with several smaller-scale wineries to the platform demonstrates growing industry interest in WINEDEPOT’s unique offering.
According to Digital Wines, it is now “on the cusp of generating first revenues” from the platform.
The company boasts a seasoned board and management team, led by founder and chief executive officer Dean Taylor.
Mr Taylor is a veteran in the space, with seven successful wine and technology ventures under his belt including a top 100 online retail business called The Wine Collective (previously known as Cracka Wines), wine storage provider Wine Ark and online wine club My Wine Guy.
It is also worth noting Mr Taylor currently holds 9.55% of the total shares in the company and is incentivised with 100 million performance shares that will more than double his current stake if he delivers on his vision to “build a diversified portfolio of technology businesses servicing the $300 billion global wine and beverage industry”.
Details of the offer
The capital raising of up to $1,637,612 comprises a private placement of ordinary shares at a price of $0.0065 per share, plus listed options issued on a 1:4 basis at a strike price of $0.015 per share and with a December 2022 expiry.
In addition, existing shareholders will be entitled to subscribe to newly issued shares on a 1:10 basis for every share held under the same terms as the placement.
The offer is open to professional and sophisticated investors classified under Section 708 of the Corporations Act.
As per the term sheet, bids by eligible investors are due on 24 October at 5pm AEST, with funds due by 5 November. The minimum investment is $2,000.