If you can get dinner delivered to your door, why not wine? That’s the game plan for Uber Eats now that it is acquiring alcohol-delivery startup Drizly in a cash and stock deal valued at $1.1 billion.
It’s a triumphant finish for Drizly and its investors but the road to get there was far from smooth.
After graduating from Boston College in 2012, the three original founders wanted a way to order alcohol on demand. Nick Rellas, Justin Robinson and Spencer Frazier launched Drizly in the Boston area, making money by licensing software to liquor stores to let them accept orders from the Drizly app. Rellas’ cousin, Cory Rellas, came aboard in 2013.
The company quickly grew, attracting investors like Gary Vaynerchuk and Suffolk Equity in their $4.8 million seed round in 2014. By 2015, Rellas and Robinson, both 25, were named to Forbes’ 30 Under 30 Food and Wine list.
The company went on to raise an estimated total of $119.6 million in venture funding, according to Crunchbase, which included big-check growth rounds from firms like Tiger Global Management and Avenir Growth Capital.
Nick Rellas credited their success to capitalizing on burgeoning e-commerce trends.
“It was never just about on-demand,” Nick Rellas told Vox in 2016. “It was actually about e-commerce and doing in alcohol what has happened in books and CDs. But we had to be humble about that because we’re a little tech startup.”
By 2018, cracks began to show. The company announced in August that founder CEO Nick Rellas would be replaced by his cousin Cory Rellas as CEO.
Cory Rellas described the shift as amicable, telling the Boston Globe that Nick Rellas would “be as much a part of the business but in a different role” and that he’d remain a board member.
However, things seemingly soured two months later. Nick Rellas left the board and founded a cannabis e-commerce company, even asking Drizly to invest, according to court filings. Drizly proceeded to sue Nick Rellas, claiming that he knew Drizly was planning to expand into cannabis and therefore violated his noncompete agreement. Drizly eventually settled the lawsuit and founded Lantern, a sister company that delivers cannabis, the Boston Business Journal reported.
With Cory Rellas at the helm, Drizly saw business skyrocket during the pandemic.
“We had to learn to scale up the supply side to meet demand in this ‘new normal,'” cofounder Robinson, who is senior vice president of new business, said in a statement in August. “Our two-year growth projections suddenly materialized in two weeks.”
On Tuesday, the Drizly founders’ rocky journey reached a major milestone with Uber’s acquisition. The deal will allow Drizly to access Uber’s massive user base while also maintaining its individual app, the company said.
It’s not clear how much original CEO and cofounder Nick Rellas stands to gain from the sale and he could not be reached for comment. Drizly did not immediately respond to a request for comment.
Cory Rellas’s official statement is all smiles about the exit.
“We are thrilled to join a world-class Uber team whose platform will accelerate Drizly on its mission to be there when it matters—committed to life’s moments and the people who create them,” Cory Rellas said.
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Axel Springer, Insider Inc.’s parent company, is an investor in Uber.