Fintech Vint hopes to turn wine and spirits into a mainstream asset class

1 month, 1 week ago - December 29, 2022
Fintech Vint hopes to turn wine and spirits into a mainstream asset class
Do you invest in wine and spirits? Fintech startup Vint thinks everyone should, and is hoping to facilitate this. But don’t expect bottles to be shipped to you: Investments via Vint are fractional.

Depending on how deep your pockets are, this is probably for the best: A recent offering that sold out on Vint was for a Macallan 78-Year-Old Collection whisky bottle worth $130,000.

There is no doubt that alternative investments are on the rise, with financial advisors communicating that the age-old 60/40 portfolio — 60% in equities, 40% in bonds — is no longer good enough. But “alts” come in all shapes and forms, and wine and spirits aren’t necessarily the most accessible, which is what Vint and others are working on changing.

Vint also now has more funding to pursue its goals: After raising $1.7 million in October 2021, it recently closed a $5 million seed fundraising round led by Montage Ventures.

It obviously doesn’t hurt Vint’s pitch that in recent years, fine wine and spirits have often outperformed other major asset classes, such as stocks, and seem immune to some of the public markets’ recent woes.

For instance, the Financial Times recently quoted data from Scottish investment bank Noble & Co showing that “the value of ‘fine and rare’ single malts was up by more than a fifth this year, with volumes jumping 23 percent.” In contrast, it noted, the U.K.’s main stock market index, the FTSE 100, “has traded flat this year.”

However, Vint CEO Nick King said the story is also about diversification, and warns against false hopes. “This is an investment. Personally, if someone tells me ‘it’s only going to go up and to the right,’ I get skeptical,” he said.

Still, King is proud that Vint has generated returns of 28.3% for asset exits on a net annualized basis since inception. This refers to wine and spirits collections that already went through Vint’s full lifecycle: “Source, Securitize, Store, Then Sell.”

Since its launch one and a half years ago by King and his co-founder, Patrick Sanders, Vint has made 50 “offerings,” which are analogous to a crowdfunding campaign. The analogy doesn’t stop here: The startup spent eight months gaining the ability to launch U.S. Securities and Exchange Commission-qualified collections.

That Vint’s offerings are acceptable to the SEC was made possible by the creation of the regulated category known as Reg A+. It is itself part of the JOBS Act, which has resulted in tailwinds for alternative investments.

The process was fairly time-consuming for a young startup, but King thinks it was worth it. “For us, this is a long-term game. You’re not going to create a new asset class overnight, so doing things the right way and working with regulators to set up a structure that adds trust to this asset class is really important.”

Despite this framing around “a new asset class,” Vint already has competitors, such as Cavissima, Cult Wine Investment, iDealWine, Vinovest and U’Wine. But more than these, the company is up against legacy options: do-it-yourself and wine exchanges.

Interestingly, King thinks because he doesn’t come from the wine world is a plus — much more than a wine company, he envisions Vint as a fintech. Sourcing exceptional bottles is still a huge part of what Vint does, though, which is why the company recently hired Adam Lapierre, who holds a master of wine certification, as its head of wine.

Vint’s recent round is now supporting the expansion of its existing team of 12, with the addition of business development and general counsel staff. As for the rest of the road map, here are some of the things King has in mind:

“We are looking at new offerings. We’ve done wine, whiskey, scotch casks, and futures, so we’re looking at potentially adding bourbon as well, and also new styles of offerings. Then we want to add more data to the platform. We look at U.S. market data, U.K. market data, auction market data to help inform our buy and sell decisions, and that’s something we want to continue to share with our users. And then finally, most importantly, is continuing to exit assets.”

It is too early to tell whether market conditions will be as favorable to Vint’s collection sales as recently, but the rise of wine and spirits as an asset class will be worth tracking either way. As inflation and uncertainty are on the rise, it wouldn’t be surprising to see alts become a fixture in more and more portfolios.

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