Wine and spirits collectibles represent one of the fastest-growing asset classes with a renewed interest emerging out of the pandemic. The industry is expected to nearly double in size to $450B by 2032. Traditionally, the collectible market in this segment has been disparate, localized, and auction-based with potential participants dissuaded by the effort needed, making it inaccessible to most. BAXUS is a blockchain-based marketplace for the wine and spirits market to connect buyers and sellers in this burgeoning market. The platform is Solana-based and tokenizes each bottle, adding provenance and introducing transparent fungibility to a highly differentiated market. Platform transactions are processed using fiat (credit cards, ACH, direct wire) or via crypto and stablecoins. It’s free to add spirits into a vault that is fully insured and there is a nominal $20 fee for the tokenization. BAXUS takes a 10% transaction fee on completed sales.
AlleyWatch caught up with BAXUS Cofounder and CEO Tzvi Wiesel to learn more about the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
We raised $5M, Led by Multicoin Capital with participation from Solana Ventures, Narwhal Ventures, FJ Labs, and several high-profile angel investors.
Tell us about the product or service that BAXUS offers.
BAXUS is a global marketplace for the world’s most collectible spirits.
BAXUS transforms the collectible spirits market by bringing it online and constructing a liquid marketplace that seamlessly connects buyers and sellers. Built on Solana, the BAXUS Marketplace harnesses open Web3 payment infrastructure to reduce costs, increase transparency, and infuse liquidity into what has historically been a fragmented, offline market.
BAXUS enables users to transact using credit card, ACH, direct wire, and crypto or USDC.
What inspired the start of BAXUS?
As someone who had been passionate about whisky for nearly a decade and was always on the hunt for a good deal, it baffled me how inefficient global alcohol distribution was and how high bottles would sell for at auction. What frustrated me, even more, was when I was running my fund, I would often have to ship a bottle to a client halfway around the world, only for them to ship it back to me for me to sell it for them. I realized that there had to be a better way to connect buyers and sellers directly to determine fair market prices and create more trust and transparency.
How is BAXUS different?
At BAXUS, our approach has always been to focus on innovation and filling the gaps that have long existed in this industry. We’ve leveraged blockchain technology to introduce a level of transparency, data, and accessibility that was previously unheard of in the collectible wines and spirits market.
What truly sets us apart is not just our technology but our commitment to creating a comprehensive ecosystem for collectors.
We’ve crafted a unique platform that offers not just trading but a complete suite of services that enhance the ownership and collecting experience. This includes real-time authentication, seamless trading, and unparalleled liquidity in what was traditionally an illiquid market.
While there are other marketplaces and platforms out there, our focus at BAXUS has always been on the value we deliver to our users. We aim to make collecting and trading as easy as a trip to the liquor store or swapping tokens onchain.
What market does BAXUS target and how big is it?
Collectible wines and spirits represent one of the most rapidly expanding and lucrative asset classes with the global luxury wines and spirits market forecasted to surge from $250 billion to $470 billion by 2032.
What’s your business model?
Once you have a collection in our vault, intake, storage, and insurance are free for your first 2 years. We charge a one-time fee of $20 per asset for authentication, scanning, and NFT minting. When you sell on BAXUS, we charge a 10% seller’s fee with no buyer’s premium. Shipping and fees are charged only upon redemption.
How are you preparing for a potential economic slowdown?
In anticipation of a potential economic slowdown, we are proactively strategizing to adapt to shifting market dynamics. Over the past few years, the whiskey industry has thrived in a seller’s market, characterized by rising prices, escalating raw commodity costs, and increased liquidity inflows. However, should there be an economic downturn, the market is likely to transition to a buyer’s market. This shift would empower cash-rich individuals to explore investment opportunities while prompting others to sell assets for liquidity.
At BAXUS, our platform is designed to serve as a conduit for individuals navigating these market fluctuations. Whether it’s a buyer’s or seller’s market, we provide essential services such as pricing, analytics, data insights, and seamless transactions. Our goal is to ensure that both sellers-seeking buyers and buyers-seeking assets have efficient access to each other, facilitating mutually beneficial transactions even in challenging economic environments.
What was the funding process like?
Rewarding. Every pitch furthered my conviction in what we’ve built and how we’ve gone about building our marketplace and infrastructure.
What are the biggest challenges that you faced while raising capital?
2023 was a tough time for fundraising, particularly during the crypto bear market.
What factors about your business led your investors to write the check?
Our investors have a clear vision for the future, that blockchain will enable new structures of capital formation as a means of unifying global communities around their passions. BAXUS’ focus on the enormous but disjointed and opaque spirits market fits perfectly into their thesis.
What are the milestones you plan to achieve in the next six months?
We are working to scale our sensor and vaulting technologies and serve the growing retail and institutional interest in the collectible spirits market.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Find your north star, figure out what it is that you do better than anyone else, and determine how you can scale that offering as inexpensively as possible. Don’t scale irresponsibly, the next round of funding is never guaranteed.
Where do you see the company going now over the near term?
Global. The demand we’ve received from around the world from collectors asking us to provide them with vaulting services so that they can sell their bottles on BAXUS’ marketplace has far exceeded our expectations. We are now planning on scaling our vaults overseas to meet that demand. We also have proprietary technology we are announcing soon with several large distillery partners, stay tuned for more details on that project.
What’s your favorite restaurant in the city?
I rarely eat at restaurants, but if you need a list of New York’s best bars, I’ve got you covered.
