Wine.com saga goes on
If someone buys it, this would something like the sixth owner of the company. Just last September, we wrote (or see extended entry below) how the company was hoping to hit its financial targets that would allow for an IPO this year (see below in extended entry).
Now VentureWire reports (sub req) a slight change in plans:
Online retailer Wine.com said it has hired investment bank SG Cowen & Co. to weigh its options regarding possibilities of raising a new round of financing or being acquired as part of the company's next stage of growth.
"We're looking for people with money," said Wine.com Chairman Chris Kitze. "That's why we hired a bank. We hired the bank to evaluate raising money for a next round and because we're interested in getting strategic investors involved. The company will probably raise additional capital because we're growing so fast."
Obviously, the weaker stock market might be playing a role in this decision, as well as the Sarbanes-Oxley Act, which increases regulation of public companies, and thus raises the cost of compliance to those regulations. For smaller companies, and Wine.com is one, it just doesn't make sense to pay the $2 million or so in costs -- especially when that's a good chunk of profit you're making! Although Kitze is apparently still open to an IPO down the road.
Our report in Sept, 2004:
Wine.com, the San Francisco wine retailer attempting to make online sales work after several failures by previous owners, said it has raised $20 million in a sixth round of venture funding.
Chief Executive George Garrick, who joined Wine.com earlier this year, has just finished installing a new management team. He now says the company should reach permanent profitability by the fourth quarter of next year.
If Wine.com continues to hit financial targets, bankers might be ready to take it public next year, Garrick said.
Baker Capital of New York led the round, which also included numerous existing individual investors. Garrick said West Coast venture capitalists were more reluctant to partake in the round, having been burned during previous investments in Wine.com.
East Coast venture capitalists, he said, seemed more inclined to fund the relatively mature Wine.com. After the round, Wine.com is valued at $43 million, he said.