18. October 2012–
Berlin-based wine shopping club Wine in Black is partnering up with Lot18, the US market leader that helped inspire it. The somewhat unusual deal, announced today, will see Wine in Black acquire Lot18's French subsidiary, Lot18.fr.
While Wine in Black will now own Lot18 France and take over its operations, it will keep the current branding in place. There is also now an agreement between Wine in Black and the US parent to share information on hot suppliers and industry trends.
"If you want to be really successful in the wine business, you need a huge customer base and the network to give them the wine they want," Wine in Black co-founder Stephan Linden told VentureVillage. The acquisition announced today will take Wine in Black to 150,000 members.
Keeping the Lot18 France branding makes sense – it's established, and will help keep a clear distinction between Wine in Black and the French subsidiary in an industry where loyalties to specific countries and regions have traditionally been important.
The Wine in Black story – from WHU to Project A
Linden and co-founder Christian Hoya met studying at WHU in Vallendar, close to one of Germany's most important wine growing regions. "That was basically the starting point for Wine in Black," Linden said. "Christian and I in the same building, and a lot of enthusiasm for fine German wine..."
After looking into various business models, including Lot18's (at the time a fraction of the size it is today), Linden and Hoya founded Wine in Black in 2011. They raised seed funding from e.ventures, Passion Capital and the founders of KaufDA, before bringing on Project A – the incubator that spun out of Rocket Internet earlier this year – as an investor and mentor in February 2012.
So what's in it for Lot18 US?
There's a wider story here. Lot18, which has raised nearly $45m in venture capital so far, has had trouble keeping up with its growth – it shut down its UK operation in July and the handover of the French subsidiary comes less than a year after its acquisition and rebranding. There were also reports of lay-offs back in January.
So, while it's a sign of trust to allow Wine in Black to keep the branding intact in France, it's also a way to avoid yet another rebranding – and possible brand damage for Lot18, the parent – in one of the world's most important wine-growing countries.
Whatever the reason, the outcome is a refreshing change from the adversarial rivalry we're used to seeing between US firms and the German companies they help inspire. We'll be watching to see how this one develops...
Featured image credit: Flickr user RVWithTit
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