Wine deals site Lot18 gets funding from Diapers.com founders

Today, Lot18, a daily deals site for wine lovers, got a financial nod from two people known for smart business moves. Lot18 announced funding from the founders of Quidsi (Diapers.com and Soap.com), which was acquired by Amazon for $545 million in 2010.

“We raised a small amount of money from individuals that we felt bought strategic value to the company, the Quidsi founders were in that group,” says Lot18 founder Philip James. “In total the round was less than $1 million.”

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That’s not a whole lot of cash compared to other funding announcements, but this is a case of “who’s who” and not “how much.” To date, Lot18 has raised more than $13 million.

Marc Lore and Vinit Bharara, the Quidsi founders, are apparently personally interested in the American wine market, which is worth billions. They say online sales currently account for only a small percentage of that amount and believe Lot18 can provide an engaging customer experience. Perhaps they see Lot18 as a potential Quidsi-like site. Quidsi, by the way, will be launching Yoyo.com, a site for toys, in the very near future.

“Marc Lore, Quidsi’s founder, emailed the Lot18 member services email out of the blue and asked to meet us,” says James. “Wine sales and distribution are highly regulated, so it’s challenging for ecommerce companies who sell unregulated items to successfully enter the space.”

This explains why Quidsi hasn’t started their own ecommerce site for alcoholic beverages, and why Quidsi’s founders would be interested in someone who has already tackled this complicated industry.

Lot18, which claims 400,000 users and more than $1 million in monthly sales, was founded in 2010 by Kevin Fortuna and Philip James. Fortuna was formerly CEO of Quigo, an advertising technology company sold to AOL Time Warner for $360 million in November 2007. James was the founding CEO of Snooth, a massive wine website.

In nine months of operation, Lot18 has grown to more than 400,000 members and more than 80 employees. This funding will support “additional verticals soon to launch,” according to the company press release. Its careers page indicates it will also be spending lots of money on new hires. Currently Lot18 provides access to rare and hard-to-find wines and artisanal food such as olive oil, chocolates, caviar and coffee. Much like Quidsi, it will be interesting to see what other verticals the company ventures into.

[Updated with investment amount and quotations from James.]