Wine.com raises $12 million more -- to try seventh time lucky
The San Francisco online wine retailer, which depending on how you count is now on around its seventh reincarnation since launching in the 1990s, will announce tomorrow that it has raised $12 million in new venture capital from New York-based Baker Capital.
The company has appointed Rich Bergsund as chief executive and a member of the board of directors. We will now stop counting how many different CEOs there have been, and we've lost count of the amount of venture capital wasted on this unprofitable company (it is somewhere around $200 million).
Wine.com became a victim of the dot-com hubris, when venture capitalists invested more than $100 million into the company even though it didn't have a clear business model. Subsequent efforts have failed, with each management team arriving to implement the management mantra of the day. Circa 2002, the team said it would focus on only those areas -- such as gifts and wine club activities -- that make money. Things began to stabilize under Chairman Chris Kitze, but then all hell broke loose when investors apparently declined an acquisition offer.
In February, Kitze and twelve other investors filed suit against Baker saying they were cheated out of up to $30 million.
That suit is still alive, and you will see here that Baker's latest investments have watered things down so much that there are 45 billion shares. And this is a private company which, at least according to Bergsund, has never been profitable.
Bergsund was most recently foundner and chief executive of IdeaForest, an online retailer of hobby and crafts. He declined to comment on the legal matters, and Baker Capital wasn't available for comment.
Bergsund he said he'll be targeting visitors to the site with the latest marketing techniques, analyzing clickstream data, for example. Wine.com will study where visitors come from, what wine pages they click on, and so on, to generate a view of what sort of wines they are likely to buy. Wine will then match them with wines in Wine.com' database
This Bergsund is a brave man.
"Rich has a strong track record turning around businesses and driving them to positions of leadership, profit and growth,'' said Baker general partner Rob Manning in a statement.
Rick, we are drinking a "good luck" toast to you as we write. May the curse be broken!
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