Is Underground Cellar out of business! Nope! It’s been reborn! Underground Cellar
has emerged from the blood, dust and ashes of the original Underground Cellar. Those of us involved in the Underground Cellar bankruptcy and the aftermath were incredulous that someone would pick up and resurrect a brand that was figuratively pilloried, tarred, feathered and run out of town by the angry villagers, but it happened.
…and by all accounts, things are going to be okay!
(if you want to give them a try, here’s a link for $50 off first purchase)
Underground Cellar is NOT out of business, just reborn! (and the “origin story” is juicy!)
The original Underground Cellar was the brain child of Bay Area entrepreneur, Jeff Shaw who wanted to bring “gamification” to online wine purchasing. When first launched in 2014, “gamification” was a magnet keyword for attracting financing – adding a “gaming” element to attract the first generations raised with video games (Gen X and Millennials), as they matured and, hopefully, became a wine buying demographic. The game was “get more than you paid for,” simply – groups of wines at a variety of prices, from very low to very high, were posted as a collection. Using the value of the lowest priced wines, the customer would select a number of bottles to purchase, and hope that, of the bottles purchased some would be upgraded.
For those entering the wine world, labels and vintages presumably were less important than exploration and the possibility of “scoring” a high-priced wine with the low price ante. Sounds fun, right – buy six $25 bottles, maybe get 3 $25’s, 2 $50’s, and perhaps, Valhalla, the $500 collectible? AND, very importantly, Underground Cellar stored your wine, at their cost, at their facility, for free! You could ask for it to be shipped at any time, and shipping for a case was free, so you could purchase 2 or 3 bottles at a time and have them shipped down the road.
Sadly, although the premise had promise, the original Underground Cellar was still not making money after 8 years (for a variety of reasons), but continued to bank on finding new funding as a “start-up” each time the money ran out. (This links to our roller coaster ride with the original Underground Cellar.)
In April 2023, an investor pulled the plug, and, came up with a novel legal concept to try to recoup their investment – they claimed the wine Underground Cellar was holding for customers was actually part of the assets they held as collateral for the funding. Underground Cellar had to go bankrupt, in part to protect customers interests in the wine.
The bankruptcy court was not a friend to Underground Cellar customers. It played Solomon – to force a settlement agreement, it suggested to both parties that their claims might hold sway with the court, and eventually, an agreement was reached between the parties. We, the unwitting customers, had a choice of abandoning the wine being held or paying an additional 20% premium to the investor (as I recall) of our purchase price) to release and ship the wine. Moral of the story – possession really is 90% of the law, always take possession!
If Underground Cellar is NOT out of business, how did it emerge from bankruptcy? Underground Cellar is making a comeback, and fans of fine wines have reason to celebrate! After navigating through bankruptcy, the company has restructured its operations and is ready to offer an exciting selection of wines once again. With a focus on enhancing customer experience and quality, Underground Cellar is dedicated to bringing you the best in wine discovery. Cheers to new beginnings and delightful sips ahead!
From the bad blood and ashes, a very reputable wine manager – Wine Country Connect – purchased the remnants of Underground Cellar, primarily trademarks, proprietary algorithms for the upgrades, and digital assets. It seems a big risk – the original Underground Cellar had lots of bad PR (some valid, some exaggerated) before the bankruptcy – but Wine Country Connect has revived it, lock stock and barrel, as they say.
So what they fixed is –
- Eliminating “possession” risk by eliminating the holding option. As travelers, it was a dream come true having a seller cellaring option, but, it turned into a nightmare. The New Underground Cellar ships all purchases within a few days after purchase – shipping is free for a case and a flat $10 for anything less than a case, as of this fall 2025 writing,
- Adding business acumen to the operations, hopefully ensuring viability! Time will tell, but Wine Country Connect has 20 years in the logistics and fulfillment business in the Napa/Sonoma region (they handle logistics for our newest online wine seller recommendation – CamX wine, too!) We did not know the original Underground Cellar team personally, but there were “tells” it was a vanity project with too little management depth – the offerings and “come on’s” always seemed to feature Jeff Shaw and members of his team in Italy and France!
The jury is still out on the overall value proposition – some people have been disappointed with their upgrades, and, of course, the posted retail value for the wines being offered is the price offered at the winery, not what third party retailers sell the wine for – but, if you enjoy discovering new wines, it can be a fun adventure!
If you’d like to give them a try, here’s a link to $50 off first purchase!