‘Wine tech is a graveyard of failure’: Napa startup lays off almost entire staff

The decision to lay off most employees was a “radical choice,” Mabray admitted, adding that it was made largely by Pix’s board of directors, not solely by him. “I would have preferred to see it happen a different way,” he said. He did not specify exactly how many of the company’s 20 employees remained, but said it was currently “a ghost team.” Wine-Searcherfirst reportedthe layoffs.

Venture capital has always been wary of investing in wine, Mabray believes, because of alcohol’s strict regulatory environment, its confusing nomenclature and the absence of many wine-tech success stories. “It’s a hard market to define,” he said of wine tech. “It has had endless failures and endless mediocre successes.”

Mabray would know: He has spent his career in this space, including at the ecommerce site WineDirect, the social media manager Vintank and the consumer data software platform Emetry.

“I think the wine industry has a stain against it in the VC community,” he said. He met with over 80 venture capital and private equity firms, but could not raise money for the third seed round that he had hoped to secure this summer.

Across industries, this is a tricky moment for fund raising. Many venture firms areslowing down their investmentsin startups, wine or otherwise, as the economy shows signs of a possible downturn. Other Bay Area startups have issuedlarge-scale layoffsin recent weeks, including San Francisco’s On Deck and San Jose’sNutanix. In Wine Country, the flashy Healdsburg aperitif brand Haus recentlyran out of fundingand announced it was looking for a buyer or would be shutting down.

This bad timing is not reflective of Pix’s potential, Mabray said. In six months, he said the company has generated $600,000 in annual recurring revenue. “I’d hoped the wine industry would see that we were trying to do something different, that’s good for everybody,” he said.

Pix set out to solve a very particular problem, which is that buying wine online can be difficult. If someone in Oakland wants to find a bottle ofRombauer霞多丽,并不总是有一个简单的方法来找出from their computer which local shops have it in stock. Many wine shops don’t keep up-to-date inventories available online; Google Shopping searches are rarely helpful. (The website Wine-Searcher offers this service, but accessing its full database requires a paid subscription.)

But a Pix user could type Rombauer Chardonnay into the website’s search bar and see their full options for where to buy the wine, whether direct from the winery in St. Helena, at a local shop or from a far-away retailer that will ship the bottle to Oakland. The search results show what each seller is charging for the wine, which can sometimes vary significantly.

The database currently contains 2.4 million wine products available from 2,800 wine sellers, all of which have integrated their inventory databases with Pix, said Mabray.

Beyond this search function, Pix had a larger ambition: to function as a “discovery platform,” helping people find wines they’re likely to enjoy. A major component of this discovery was pegged to the site’s editorial arm, the Drop, which for the past year published regular articles about wine. The Drop had generated considerable buzz among wine insiders; one of its most popular pieces was aboutBuckfast, a tonic wine that’s a popular breakfast beverage in Scotland. Mabray had poached well-known wine journalists to lead the Drop: chief content officer Erica Duecy, executive editor Felicity Carter and senior staff writer Janice Williams.

Mabray was emphatic that Pix was not a marketplace — that is, it didn’t sell any wine itself, but rather directed customers to other sellers. Within months of launching, it had partnered with theWine Advocate, a leading publication, so that anyone reading a Wine Advocate article could click through to find, via Pix, where the featured wine could be purchased.

The search on Pix doesn’t work perfectly. Type “stone fruit” into the search bar, for example, and 14 of the initial 16 results return the same wine, Imagery Estate California Chardonnay. Mabray acknowledged that the user experience was not yet where he hoped it would be, citing the “herculean task” of creating this search function.

在2021年8月的一次采访中,大约一个月before Pix debuted its beta version, Mabray told The Chronicle that the company planned to generate revenue through keyword bidding, which allows businesses to pay to show up higher in the search results for a given keyword. (This is how Google Ads makes money.) But after launching, Mabray said he realized that it would take a long time to build up enough traffic to make keyword bidding a viable business.

Instead, he zeroed in on another immediate revenue stream: digital merchandising. Wineries, importers and other suppliers paid Pix a fee to “clean up” their wine inventory online, he said, ensuring that the names of their various wines were displayed consistently and that the wines showed up in an attractive way in a Pix search. The company currently has about 50 clients for this service, Mabray said, but has temporarily stopped taking money from them while Pix remains in limbo.

The exact ownership structure of Pix remains unclear. Mabray is a minor equity holder. Other investors include Peter Lamm, the managing partner of Fenway Partners, a Boston private equity firm. (Fenway itself is not an investor, said Mabray.) There are a number of angel investors, he added, and though he would not name any of them, he said the list comprises a “who’s who of the wine industry.”

Mabray still hopes to find a home for Pix, and is optimistic that he’ll find a buyer that will let Pix become what it always wanted to be. He would like to remain CEO and wants the company to keep its editorial function alive. If he doesn’t find someone who wants to buy the company, he’ll look into selling Pix’s intellectual property.

“Wine tech is a graveyard of failure. Hopefully we don’t end up in that,” Mabray said. “Honestly, the wine industry needs a tool like this.”