About a year ago, wine tech company Pix started making noise in the UK about its revolutionary wine discovery platform. The AI-enhanced search function, coupled with a team of top industry names – and millions of dollars in backing – pointed to the future of wine online.
But last month, that future became less certain, as it emerged staff from the platform’s editorial arm, The Drop, had been laid off.
“Pix is currently running,” CEO Paul Mabray tells Drinks Retailing. “The Drop is closed for now.” He hopes one day to restart it, but that will depend on funding.
Having convinced investors to stump up $7 million in previous funding rounds, Mabray’s latest pitch was unsuccessful. He says what failed this time “was my ability to convince institutional investors about the potential of wine online”.
“We had a model perfect for alcoholic beverages that a) did not put us in the middle of the transaction and b) was not traffic dependent. The litany of wine companies ahead of me and the fact that our model is alc-bev specific and doesn’t fit into a nice VC box made it virtually impossible,” he explains.
Mabray says Pix generated $600,000 in annual recurring revenue – annual subscriptions paid in monthly instalments. “No other wine-tech company in history has created that type of value exchange and revenue in the first six months of business,” he claims.
But Mabray goes on to calls wine-tech “a graveyard of failures and mediocre successes”.
He says some of the best successes are only a result of the fortitude to keep a small business going.
“There is no $100 million software company in wine,” he says. “There are barely $300-$400 million companies that sell wine.”
Mabray adds that the top online wine sales companies are “barely a rounding error compared to the wine revenue of Costco or TotalWine”.
Indeed, reports suggest Costco’s global beverage alcohol sales for 2020 topped $5 billion.
Right now, Mabray is looking for a buyer and he says he’s “open to a variety of scenarios”.
“My guess is that it will probably come from a company that is both wine and tech,” he adds.
And there is plenty of support for Pix. The trade, including former employees of Pix, took to Twitter to commend Mabray and the team for taking a risk.
Former head of wine at Pix, David Round MW, Tweets: “Getting involved with Pix wasn’t a risk for me. I got to do fascinating work with a team of bewilderingly talented people (with my imposter syndrome flaring up again) on something that would benefit trade and consumers. I’m deeply sad at the outcome but I would do it all again.”
Meanwhile Hal Wilson, owner of Cambridge Wine Merchants, calls the news “a real bummer”.
“I admire and am excited by innovation in our industry and boy do we need it!” he Tweets. “I hope there is a way through to Pix taking its place in wine’s future. We did a lot of work to feed our inventory into Pix’s database and were excited to see a UK launch.”