Mobile Commerce

Investors Pour $13 Million Into Drizly Delivery Expansion

The nascent “apps for booze” industry has just gotten its latest nod from venture capitalists.

Drizly, the Boston-based company that lets customers use their smartphones to order alcohol, and which promises on-premise delivery in less than an hour, said it raised $13 million from investors in a Series A round that included Polaris Partners, which values Drizly at $40 million, The Wall Street Journal reported yesterday (May 18).

Under Drizly’s business model, consumers use the app to register a card and then place their orders through local retailers. Age verification comes on site, when the customer must use the app to scan a driver’s license and ensure the legal purchase.

The financing comes on the heels of last week’s news that the Wine & Spirits Wholesalers of America, a trade organization, had acquired a minority stake in the eCommerce startup for an undisclosed sum. That action appears geared toward staving off at least some competition as the trade group’s stake follows the April applications by Amazon to offer beer and wine through its grocery delivery service.

Capital raised in the latest two rounds is being earmarked to fund Drizly’s growth, with the WSJ reporting that Drizly aims to expand to 30 cities nationwide, and additionally target $100 million in annual sales by the end of 2016.

And if the company’s bustling May is any indication, Drizly won’t be resting on its laurels, as the company also made a May 14 announcement of its expansion to Orange County, California. Orange County users who order from the app by May 30 are eligible for free delivery, whereas it normally costs $5 for delivery. Areas in Orange County where Drizly beer, wine and liquor delivery is now available include Balboa Peninsula, Corona Del Mar, Costa Mesa, Huntington BeachIrvine, Newport Beach and Newport Coast, the company’s blog post states.

In total, outside investors have now poured $17.8 million into the firm.

The latest investments will aid in Drizly’s expansion plans as well as plans to double the startup’s staff to include 80 positions. Drizly also plans to expand existing partnerships with social media sites including Thrillist and Swarm, through which customers can order specialty brews and other beverages for delivery.

“We’re in an industry that hasn’t moved in 80 years – since the end of Prohibition,” Drizly CEO and co-founder Nick Rellas told WSJ. “It’s a $100 billion market and less than 1 percent is online so it’s a compelling opportunity.”

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