Alcohol Delivery App Thirstie Pours Itself a Double, Acquires DrinkFly

Source: Xconomy

João-Pierre S. Ruth

February 17th, 2016

The race to be the top app that people use to order alcohol for delivery took a new turn on Wednesday.

New York-based Thirstie has acquired DrinkFly, a Chicago-based company also in the alcohol delivery business. With this deal, Thirstie gets into four new markets, bringing its coverage to more than 22 cities, says CEO Devaraj Southworth. The DrinkFly founders will remain onboard, operating in Chicago for Thirstie. Southworth would not disclose the size of the deal, but it was for cash and equity.

DrinkFly had been growing its sales, he says, and Thirstie wants to further scale up the business. “It’s going to help us in the Chicago market,” he says. “We had a presence there; it’s going to make our presence much stronger.” The multitude of craft brewers across Illinois, who could become supplier-partners, also made DrinkFly attractive.

Consolidation in this industry should be expected given the numerous on-demand companies all competing to get wine, beer, and spirits to customers’ doors within one hour. Other New York-based companies in this niche include Minibar and Swill. Boston’s Drizly offers a similar service. Even Amazon got into this market last year, starting off with service in Seattle and then New York.

Like some of its rivals, Thirstie is largely a marketing platform and does not hold inventory nor make deliveries itself. Orders are fulfilled through local participating liquor stores, who also handle verifying the customer is of legal drinking age, Southworth says.

“Today, we have about 340 retail partners,” he says. By not getting into logistics, the company keeps costs down while tapping the experience of the liquor retailers.

Southworth says the delivery business is admittedly becoming commoditized, so last June his company started an editorial section called The Craft presenting tips, stories, and advice on cocktails, wine, beer, food, and local events. In addition to giving Thirstie some clout as experts in those areas, Southworth says it boosted business by encouraging larger, repeat orders.

“We’re committed to this,” he says. “We brought on the head of content from JackThreads, who knows a thing about content to commerce.”

Thus far Thirstie has raised more than $2 million from private investors, Southworth says. The company is focusing on its current platform rather than pursuing too many ideas at the same time. For instance, Thirstie has not jumped at the mail order-subscription business model, where samples of products are sent to consumers-like Birchbox or Dollar Shave Club. “That is something we’ve been approached with numerous times.” Southworth says. “It works for some industries. It’s something that we’re looking at, but it needs to fit in with our content-to-commerce strategies.”