Deal Review: Care to help the Champagne Dame ride the bubble into Australia?
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Attempting to be Australia’s new home of champagne, e-commerce company Emperor offers a wide selection of curated and exclusive champagnes. An Australian first, the subscription champagne service provides consumers with event experiences, education and glassware.
Founded in 2017 by CEO Kyla Kirkpatrick (aka The Champagne Dame), the Emperor brand hopes to be the largest champagne provider in Australia, satisfying Australia’s demand for high quality imported champagnes.
Considering this, Kirkpatrick has developed a diversified omnichannel approach, selling a range of champagnes through a seamless online buying experience.
In an attempt to raise capital, Emperor is utilising equity crowd funding through Equitise, aiming to source $1,499,600 at a pre-money valuation of $9.6 million.
The funds will be used to scale their global customer base with investments in product development, sales & marketing, administrative support and debt reduction.
Emperor’s online platform embodies an e-commerce store, managing and fulfilling customer orders, with additional touch points for customers, adopting both Business to Business (B2B) and Business to Consumer (B2C) channels.
The subscription offering, known as The Emperor Champagne Club, gives consumers monthly package selections of rare and fascinating champagnes, accompanied with a digital mini masterclass.
Moreover, the subscription yields access to VIP events and exclusive access to winemakers and other enticing benefits.
Emperor has finalised the development of its software platform and is positioned to explore expansion opportunities, delving into the Asian market.
It’s contracted major champagne wholesalers, holding the rights to exclusive imports into Australia. The business aims to leverage this relationship to give its subscribers a much wider selection. It also incorporates wholesaling to corporate functions, bottle shops, hotels and restaurants.
This financial year, Emperor is on track to earn just under $1 million in revenue, averaging an order value of $364.26 per customer.
It’s exploring an expansion into Asian markets, and predicts that will add a further $371,516 on top of existing revenues.
The major risk that Emperor faces is its supplier risk. The main benefit of Emperor’s product offering is its ability to source exclusive champagnes. Therefore, the company is heavily reliant on the current contracts to uphold their competitive advantage and exclusivity against other cellars.
If Emperor cannot secure new contractual agreements with suppliers or retain their existing arrangements, there’s no guarantee that it could source comparable products.
Whilst Emperor has existing supplier agreements in place and a positive business growth, further business expansion will likely present significant challenges from other competitors within the industry.
Any investor must also consider whether the business has enough resources to facilitate adequate growth in reaching a break-even position or greater and the reasonableness of the bubbly valuation.