Next Glass Inc., the parent company of Untappd, has received a strategic investment from a Boston-based equity firm that officials say will accelerate the Wilmington-based company's growth.
Next Glass also named Trace Smith as CEO, replacing Kurt Taylor, company founder, after Taylor stepped down from the role.
Providence Strategic Growth, an affiliate of Providence Equity Partners, has made a strategic investment in Next Glass Inc. to help grow the business, Smith said.
The ownership details and terms of the transaction with Providence Strategic Growth (PSG), which took place in March, were not disclosed. Declining to reveal the amount of the transaction, Smith said, “This is a significant strategic investment.”
With the transaction, Next Glass will maintain its headquarters at 21 S. Front St. in downtown Wilmington, said Smith, who previously served as COO of the firm.
Smith transitioned into the CEO role after the investment by PSG. The Taylor family still has ownership in Next Glass, and Kurt Taylor will continue to be an influence on the company through his role on the firm’s board of directors.
Next Glass also has offices in Charlotte and Durham, with remote employees in several states, he said.
Next Glass, a Wilmington-based startup founded in 2013, develops software and creates experiences that connect consumers, retailers and producers in the alcohol beverage industry.
Next Glass acquired Untappd in 2016, and in February it also acquired the assets of BeerAdvocate
“As far as next steps, we have a number of projects that are in the works that PSG will help us accelerate with the primary capital they’ve invested,” Taylor said. “There are also really exciting opportunities for us to be a platform on which they acquire other companies in our space.
“I think this has huge potential for the company and for Wilmington because I think a lot of growth will come from these acquisitions and the primary capital they have injected into the business,” Taylor said. “My hope is that we will be able to continue to grow as quickly as we have and add more jobs and opportunities in the Wilmington area.”
The firm, however, has been impacted by the recent COVID-19 crisis and has experienced layoffs, Smith said, declining to share how many employees were affected. Smith said the firm still employs more than 70 people, the majority of whom are in Wilmington.
The strategic investment with PSG has been in the works since 2019 and was not in response to the COVID-19 crisis, Smith said. The transaction, however, took place at the end of March, just after some of the business shutdown that happened across North Carolina in response to the pandemic.
That shutdown largely impacted bars and restaurants, which are under state order to close doors to the public, only doing business for pick up or delivery.
“PSG’s support and investment really helps us bounce back more quickly and bring more people back, which we are excited about. We would have looked to do that without this investment but certainly that additional capital will help us regrow more quickly post-COVID-19 and will help us bring more team members back,” Smith said. “We certainly hope this is a temporary speed bump, and we understand that the economic conditions might be soft coming out of it. But even in an environment where we are not back to 100% in the summer, we intend to bring people back.”
With the PSG investment, Next Glass has also created a business support initiative that started in the middle of March and will run through at least mid-May. Through that initiative, Next Glass has deferred renewals on Untappd for Business subscriptions for existing customers and, for new customers, is offering 80% off their first month on Untappd for Business, representing nearly $2 million of near-term relief for customers during the COVID-19 crisis, stated a joint news release.
The initiative “provides bars, restaurants, breweries and other retail venues some relief during this difficult period, and that support by Providence to allow us to do right by our customers really affirms that they were the perfect partner for us. We are grateful to them for that support,” Smith said.
Next Glass plans to make future acquisitions with the PSG investment, Smith said, adding that the “goal is to continue to grow the business, the heartbeat being in Wilmington, and we look forward to continuing to ramp things up in Wilmington.”
“They’ve invested and put capital on our balance sheet to help us continue to grow both by investing in more product innovation, accelerating our go-to-market and enabling us to make some add-on acquisitions of other companies in the beverage-alcohol software space,” Smith said of PSG.
Smith explained his vision for the company's future.
“I think there’s a ton of opportunity for organic growth, further investment in our existing products, bring[ing] on more engineering and product resources to help build products that our customers want to see us bring to market,” Smith said. “There’s a rich landscape for add-on acquisitions in a very fragmented space, with alcohol technology, and we think there's a great opportunity to pursue that, which will create more opportunity for our team in Wilmington, more growth."
The recent investment by PSG aims to fuel product innovation and growth for Untappd, BeerAdvocate and Untappd Live!, a division to offer festivals and events for both the BeerAdvocate and Untappd communities. It will also push its business products, including Untappd for Business and Untappd Marketplace, stated the release.
The company’s SaaS platform, Untappd for Business, is used by nearly 20,000 venues in 75 countries to publish and promote menus for beer, wine, cocktails and food in print, online and in-store digital signage, officials said in the release.
It also recently launched Untappd Marketplace, a web-based B2B communication tool connecting alcohol wholesalers and self-distributing breweries and their customers to streamline the alcohol ordering process, officials said in the release.
PSG's investment also intends to support the firm’s pursuit of add-on acquisitions of technology platforms serving beverage alcohol producers, wholesalers, resellers and consumers.
“This puts some additional dry powder on our balance sheet to allow us to invest in product innovation, so more product, more engineering to help build products to take to market that our customers love," Smith said.
“It allows us to iterate on existing products that we have in market and add features that our customers want to see and will allow us to continue to invest in some of our new initiatives, like Untappd Marketplace and Untappd Live, that have shown some great early promise and that we’re incredibly excited about,” Smith said.
“Trace and the Next Glass team have built an exceptional brand and technology platform, with a passionate consumer base, in a highly fragmented and growing market,” said Matthew Stone, principal at PSG, said in the release. “We have been impressed by the company’s growing offering and strong value proposition to both SMB and enterprise customers across the globe and are excited to partner with the Next Glass team to further build on their success.”
Smith has been with the firm since November 2013 and has worked closely with Taylor, both at Next Glass and in previous positions at an investment banking firm.
Taylor said that he is turning his attention to TRU Colors, an organization that employs gang members as a way to combat violence and stop the associated cycle of poverty.
Taylor joins his father, George Taylor, chairman and CEO of TRU Colors, who previously served on the Untappd board, to push the firm forward. In the fall, TRU Colors purchased the old Century Mills
property at 715 Greenfield St. and is in the process of renovating the facility for a brewery, restaurant and office space.
“I want to use my time and some of the proceeds from this to help them accomplish their goals. They have ambitious goals of wanting to end gun violence and end the cycle of poverty. That resonates with me and is something that I’ve wanted to get behind since my dad started working on it. And so, this affords me the opportunity to work with them on opening their brewery. And I think it’s a really good cause for me to focus my energy on,” Kurt Taylor said.
He will be phasing out of the day-to-day operations of Next Glass over the coming months, he said, adding that he will remain active on the board and continue to participate as both an investor and adviser to the company.
“I’m excited to stay close to the business,” he said. “It’s positioned well. Trace is a tremendous leader, and he is positioned to do great things with the business.”
About the recent investment, Kurt Taylor said, “I think it’s a great outcome on many levels. Our investors got a very strong return, the company is positioned for tremendous growth with help from a strategic investor and I am able to take a step back and focus on a social mission that is important to me and my family. So I really do think it’s a great outcome for everyone involved."