- Drizly raised $50 million in a Series C funding round, led by New York-based investment firm Avenir, the company said in a statement. Tiger Global and other existing investors also participated in this round.
- The alcohol delivery platform said it has grown more than 350% compared to 2019, while "achieving sustained profitability." The number of retail partners on Drizly's platform has doubled since Jan. 1.
- As consumers migrate to purchasing alcohol through e-commerce channels, Drizly forecasts 20% of off-premise alcohol purchases — normally at liquor, grocery and drug stores — will be transacted online within the next five years. Less than 2% of these were online earlier this year.
As the coronavirus remains entrenched throughout the U.S. for most of 2020, e-commerce sales have surged. Alcohol is among the biggest beneficiaries from the uptick. The spike comes as people spend more time sipping drinks at home or holding virtual happy hours because the places they previously consumed wine, beer and spirits have sharply curtailed business for much of the year.
Until the coronavirus pandemic, most consumers had largely ignored going online to purchase alcohol. Now, many people have woken up to the convenience of getting items delivered straight to their door. While not everyone will stick with e-commerce to get their alcohol delivery after the pandemic has ended, or use the service as often, 2020 has provided meaningful momentum for the segment that will undoubtedly draw new subscribers to Drizly's platform.
"Alcohol consumption as a whole is looked at very differently now," Reid Greenberg, executive vice president of digital and e-commerce at Kantar, said earlier this year. "Those people who have adopted to e-commerce have realized it's much easier, and these companies have paved the way to make it much easier to facilitate e-commerce orders. The pipes have been laid and they're not going to lie dormant."
Minibar and other companies that focus exclusively on this category, along with broader delivery services like Instacart and Postmates, have been among the businesses to prosper from the increase in alcohol purchases online. For Drizly in particular, the timing is right to tap into the uptick in demand to add to its coffers for future growth.
In addition to increased demand, Drizly is profitable — a threshold investors love to see when they consider whether to put money into a young company, and something upstarts can use to push for a higher valuation. In the latest funding round, some participants that previously invested in Drizly have liked what they see enough to give them more.
The investment will be used for both Drizly and Lantern, its independently operated company focusing on online cannabis commerce. Drizly, the largest operator in the alcohol e-commerce delivery space, operates in 235 markets across the country.
Despite its strong presence already, Drizly and other companies operating in the space have plenty of runway ahead for growth. Avenir, one of the investors in the current funding round, estimates the off-premise alcohol market to be worth $120 billion today. If Drizly's projection of online sales volumes holds, roughly $24 billion of that could be up for grabs.
Drizly, which uses its software to connect retailers or liquor stores with consumers, was growing even before the pandemic. The recent outbreak "certainly has accelerated" that pace of growth, Liz Paquette, head of consumer insights at Drizly, said in May. As consumer buying habits evolve and stores look for alternative ways to generate sales in a far-from-certain environment, Drizly stands to be a market leader in alcohol e-commerce delivery.