Revolution LLC, an investment company created by AOL co-founder Steve Case, is taking a stake in Internet wine seller Vinfolio in a bid to transform the privately held firm into the eBay of fine wines.
Terms of the funding deal were not disclosed.
Case is a long-time Vinfolio customer and wants Revolution to play an active role in turning the business into the eBay of fine wines, Revolution executive Philippe Bourguignon told Reuters in an email.
EBay Inc is the No. 1 provider of online auctions in the United States. Vinfolio's direct competitors range from Christie's and Zachys to WineBid.com.
As part of the new funding agreement, Bourguignon and Revolution Executive Vice President David Golden will join Vinfolio's board.
Golden was vice chairman and director of the global investment banking practice for technology, media and telecommunications at JPMorgan prior to joining Revolution.
Bourguignon, a former director at eBay, is currently the Chief Executive of Miraval Arizona, a Revolution Resorts property in Tucson, Arizona. He has also held executive positions at Club Mediterranee SA, Walt Disney Co and the World Economic Forum.
San Francisco-based Vinfolio was hit hard when demand for fine wine and other luxury items withered in 2009 amid a deep recession.
A cash crunch forced a restructuring in January 2010 and a group led by Jon Moramarco, managing partner of BW 166 LLC, acquired Vinfolio's secured debt, according to a blog written by Vinfolio founder and former Chief Executive Steve Bachmann.
The group installed new management and relaunched the company in March.
The cash infusion from Revolution will help with day-to-day operation costs and future growth, Vinfolio spokesman David Ruvalcaba told Reuters.
In addition to hosting online wine sales and auctions, Vinfolio buys private collections, offers full-service storage in San Francisco and Napa, California, and provides cellar management software.
(Reporting by Lisa Baertlein; Editing by Steve Orlofsky)