New Vine Logistics, a Napa company that helped hundreds of wineries move into the world of e-commerce and ship directly to consumers across the United States, shut down abruptly Friday when its investors pulled the plug.
It laid off most of its about 100 employees at its Napa headquarters and American Canyon warehouse after two venture capital firms decided late Wednesday not to re-invest in the company, according to sources close to the deal.
A core group of employees, including New Vine founder Katie Hoertkorn, continued working Monday to wind down the operation.
Messages left for Hoertkorn were not returned.
Many wineries scrambled Monday to figure out how to retrieve wine stored at New Vine?s warehouse and whether it still intended to make pending wine shipments.
In an e-mail sent Monday to customers, Hoertkorn said New Vine ?is in a state of financial crisis and has been forced to cease operations.? The company intends to ship all orders made before 5 p.m. Saturday, she said.
The e-mail did not indicate if the company could manage that task with its skeleton crew, or how it would fund the continued small-scale operation.
New Vine began to collapse Wednesday when two venture capital firms reversed course and decided not to reinvest in New Vine, according to several sources familiar with the deal.
?The investors who had committed to providing the funding decided it was cheaper to just walk away,? said Barbara Insel, a Napa wine industry analyst who served on New Vine?s advisory board. ?It was a shock to the management and everyone else.?
Silicon Valley Bank, which had loaned the company money, stepped in Friday and effectively shut the company down, according to Insel and a New Vine employee who spoke on the condition of anonymity.
However, the bank said it was informed by New Vine that the company planned to cease operations.
?We were working with investors up until last week to reach a soft landing, to wind things down or figure out a solution,? said Carrie Merritt, a spokeswoman for Silicon Valley Bank, which has a branch in St. Helena. ?It was not the decision of the bank to cease operations.?
The bank is continuing to work with New Vine, Merritt said.
?At this point we don?t know what the final resolution will be,? she said.
Foster?s Wine Estates, which owns Chateau St. Jean and Beringer Vineyards, did not expect any major issues finding a new wine shipping company to replace New Vine, said spokeswoman Allison Simpson.
?There is no panic on our side,? Simpson said. ?There are three or four other companies that can handle the larger club shipments that we send out regularly.?
The wineries are working on retrieving their inventory, Simpson said.
New Vine Logistics helped more than 200 wineries and wine retailers ship their wines directly to customers in other states and comply with the complex web of state laws that regulate alcohol sales.
The impact of its closure could have wide ranging implications for small wineries looking for new distribution channels.
?For us it?s a minor headache,? said Steve Tamburelli, general manager of Chappellet Winery in St. Helena, which used New Vine to send wine to some of its club members.
Chappellet only used New Vine to ship to states with laws that make it more difficult for the winery to ship direct. But some wineries used the company to ship wine to all members of their wine clubs, and have large amounts of inventory at New Vine?s warehouse.