At just 25, American entrepreneur Anthony Zhang has already founded and sold two companies – Envoynow, an intra-college food delivery service, and Know Your VC, a review platform for venture capitalists and angel investors. His third and latest, an online wine investment platform called Vinovest, might be his largest project yet. That’s because Vinovest fills a previously untapped niche: wine investments for the retail investor.
While these traditionally involve large amounts of money, personal relationships with brokers and dealing with storage logistics, Vinovest takes all three out of the equation. Driven by technology and a team of industry professionals that includes several master sommeliers, the platform allows entry into the fine wine investment market – one that, according to Vinovest, has consistently outperformed the S&P 500 over the past 30 years – and for as low as US$1,000 (S$1,300).
What inspired you to create Vinovest?
I was trying to invest in wine myself about five years ago and I realised that unless you are wealthy or born into the wine industry, it’s tough for a newcomer to invest in wine. It’s hard to get connections to the right brokers and high- end auctions. Wine storage – if you didn’t own a cellar – was also expensive and insurance, very confusing. It just didn’t sit right with me that this high performing asset class was only available to the wealthy. I wanted to create a solution for myself and for others like me who were new to this world.
Going into the world of wine, what were some of the biggest surprises?
How open-minded people were to something new like Vinovest was big. Wine is a traditional industry and it’s been made the same way for thousands of years. On the business side, our partner wineries proved to be very receptive. Our value proposition is that we are bringing so many new millennials and tech-savvy people into the wine world from an investment standpoint, who are learning more about these wine estates that only the older and ultra-wealthy knew about before.
Why invest in wine?
In this low-interest rate environment, it doesn’t make sense to invest in bonds or keep your money in cash. There are not many instances where people can diversify into an asset class that has such stable or attractive returns. Over 95 per cent of Vinovest’s customers are everyday retail investors who had never heard of wine investing before this.
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How do you keep operational costs low?
We use the same network of storage facilities that major players in the wine world already use. This means that when we acquire the wine, it’s frequently already in one of our partner warehouses, so it doesn’t even move. That also helps us have a really strong provenance. We know that we’ve bought the products directly from the winery and that they are stored in particular warehouses. Finally, we’re also a technology company, so we want to make sure that we’re building software that scales, and that we don’t need to hire more people on a linear basis as we grow.
How much wine is Vinovest currently moving around?
We’re moving around several million dollars worth every single month. We’ve also been growing about 25 per cent month on month for the past year. We see that accelerating further as more investors get curious about wine – or just about something new that’s outside of the stock market.
What are some of the company’s challenges?
I think it’s allowing everybody to participate in a low-cost way. It’s a bottle of wine, a physical thing, and there are going to be limitations. It’s not like with platforms like Robinhood, where anybody with $10 can invest in a fraction of a share. That doesn’t exist in the wine world as you have to buy an entire bottle or a case for it to make sense. So, I think there are challenges about accessibility but we are continuing to decrease the cost of entry.
What do you like to drink?
I personally really like white Burgundies. I also love wine from Rhone – either something larger like Chateauneuf du Pape or an aged syrah from Cote Rotie or Heritage.