While there are plenty of places to buy wine online, Underground Cellar, a new Y Combinator-backed startup, has come up with an interesting new concept for wine sales, where customers can purchase package deals that include random, free upgrades to premium, rare, and private-stash bottles from a variety of wineries.
These wines can then be dispatched to customers right away, or they can be held in Underground Cellar’s climate and temperature-controlled wine cellar for on-demand delivery.
Users of the service can select their preferences ahead of time by indicating their preference toward reds over whites, sparkling wines over still wines, more affordable bottles over pricey ones, and so on. The choices they make dictate the type of wine that will be sent to them.
At launch, more than 100 wines are available for purchase from around $20 up to $500 a bottle or more, though some rarer or older vintages might cost even more. Customers can also pick out some “underground wines,” which are hard-to-find wines from exclusive vintners, such as a ’71 Hermitage La Chapelle.
These types of wines aren’t offered at any local or online store; customers can only purchase them through Underground Cellar. This way, customers will get an opportunity to taste something they might not be able to otherwise. Jeffrey Shaw, the co-founder of Underground Cellar, says he launched the company so wine could have more immediacy.
“For too long, it’s been a product that you needed to find at retail, and then there was no opportunity for buying online,” Shaw said. “The entire process is eroding people’s desire to try new wines.”
The startup doesn’t have a winery of its own, though. Instead, Shaw and his team have been working with different wineries around the world so they can provide their customers with a wide range of wines from all over the place. Thus, the company acts as more of an intermediary between wine sellers and wine buyers.
“We’re allowing wineries to distribute wines quickly and cheaply,” Shaw said. “We’re allowing consumers to try wines that they typically wouldn’t be able to find.”
The company’s wine cellar, which can store up to 10,000 bottles worth of product at any given time, is used as the fulfillment center where all these wines are shipped out to customers.
“When you re-order, your next shipment will return to the climate-controlled wine cellar until it’s ready to go back up for sale again,” Shaw said. “This earns money for us and allows you to try wines at pennies on the dollar.”
The model has proven attractive enough for the startup to attract $1.5 million in funding so far, including money from notable investors like Ron Conway and Y Combinator. The company is also working with an undisclosed partner who inspired the website’s name.
“He came up with this idea that you’re underground until you’re discovered,” Shaw said. “Our pricing goes away when it’s sold out, so you’re never overpaying for wine.”
