Cult Wine stabilisation ‘genuinely encouraging’ following pre-tax losses of £5 million
Why does this matter?
Cult Wine's turnaround shows how a beverage marketplace startup reduced losses from £6.4M to £5M while building AI-powered features and achieving 180% GMV growth with detailed platform metrics that serve as benchmarks for BevTech founders.
Highlights
Cult Wine’s CEO Tom Gearing said steps taken to stabilise the business were already showing signs of success, with the first quarter of this year seeing consecutive growth after a "better than expected" final quarter of 2025. It followed the publication of the company’s annual accounts at Companies House, which revealed pre-tax losses of £5 million in the 12 months to December 2024. Turnover in the period was also down 43% and there was an increase in net liabilities to £21.6 million, up from £17.1million the previous year. However, speaking to the drinks business last week, Gearing said that in addition to an improved trading performance in 2025, where revenue and sales exceeded those in 2024, the first quarter of 2026 had been its strongest quarter on record, up 97% quarter-on-quarter and 68% year-on-year. February had been its biggest month to date, but this was surpassed by March, making it three consecutive months of month-on-month growth. “Sell-side activity tripled versus Q4, which is significant because that's the marketplace flywheel beginning to turn properly,” he added. Meanwhile, the returning buyer rate in March was 80%, with 87% of all-time gross merchandising value (GMV - the total value of goods sold on the platform before fees, expense and returns are deducted), on the platform coming from repeat buyers. “The cohort data is particularly interesting: customers acquired in 2026 are spending 6.8x more per month than customers from 2023,” Gearing said. “The product is getting better and the market recovery is showing up directly in the trading data.” In a press releases posted online in March, Gearing said the data they was seeing across its platform in early 2026 was "genuinely encouraging". "After three years of correction, the signals are pointing in the right direction — returning buyer confidence, improving portfolio performance, and the kind of two-sided market activity on CultX that indicates healthy price discovery rather than distressed selling," Gearing noted. Recovery and repositioning 2024 was described in the accounts filed at Companies House last month as “a year of recovery and repositioning” that had seen the company take “decisive steps to strengthen the foundation of the business” even while market conditions remained “challenging” against a backdrop of “continued macroeconomic uncertainty” The losses in the 12 months to December 2024 were also an improvement on losses of £6.4million in 2023. “These efforts have placed Cult Wines in a far stronger position for 2025 and beyond. We emerged leaner, more efficient and better equipped to scale as the market stabilised and growth returns,” the company accounts had said. The accounts also noted that while total revenues were down by £54million due to the falling wine price and “higher-than-normal” liquidations and exits on the back of “negative investor sentiment”, the group losses were “significantly” lower in the second half of the year, and it ended the year “at break-even”. Following the publication of 2024 results, Gearing told The Financial Times that a comment in the auditors’ statement about the company's “material uncertainty” due to its net liabilities “that could cast significant doubt on the group’s ability to continue as a going concern without further funding" was “fairly boilerplate language”. He pointed to the improved figures for 2025 and added that the moves made last year to stabilise the business were already showing signs of success. Turnover for 2025 (which hasn't yet been released) was “higher than in 2024, despite the difficult market”. During the last year, the company reduced its headcount from around 65 full-time staff to 35, reducing labour costs by 44% and overall operating expenditure by 40% and delivered approximately £4.5million in annualised savings by the end of the year. “The actions taken in 2024 have repositioned Cult Wine to capitalise on future growth,” the company’s directors said. “Our cost base is now significantly leaner, our technology capabilities are market-leading, and our operational infrastructure is optimised for scale.” Metrics are moving in the right direction Gearing also told the drinks business that CultX key platform metrics have moved “materially” since the start of 2026. He pointed out that gross merchandising value (GMV) has grown 180% since the end of 2024, “reflecting a substantial increase in the value of wine changing hands on the platform”. Similarly it saw more than twice the number of new users register in February 2026 than in November 2025, “the fastest rate of new participant growth since the platform launched”. Around 57% of the wines listed on CultX currently have active bids, he pointed out, with 2,760 wines attracting buyer interest, and 44% of active markets showed a “competitive bid dynamic”, with multiple buyers competing for the same wine. Peak numbers of active sellers were also being matched by rising buyer activity, it said “creating genuine two-sided market velocity rather than distressed selling”. “Convergence of rising buyer demand with increasing seller participation is the hallmark of a liquid, healthy market. These are not vanity metrics. They are the mechanics of price discovery working as they should,” the company said. New additions Gearing also pointed to a number of new additions to its Cult-X platform, which includes AI label scanning. This makes it possible to p, oint a phone at any bottle to show live market data “within seconds”, Gearing said, including the price, bid and offer, trade history and critic scores. Other additions include multi-currency and international delivery (Hong Kong, Singapore, the UK and US), a live feed of the most recent transactions and a 'Sell Now' list, of wines where the current bid is at or above market price, so sellers can see immediate exit opportunities. It has also opened up historical price data to non-registered visitors for the first time. Guests can see 12 months of price performance on any wine without creating an account while registered users can see full trade history and complete price graphs for up to 12 years. “It felt like the right moment to remove that friction, particularly with buyers returning to the market,” Gearing said.
The Drinks Business
