CHASING UNICORNS

Phil Mikhaylov and Cody Modeer are revolutionizing the wine and spirits auction space, making it easier to buy, sell, and collect exceptional bottles.

Entering the primary processing facility for Unicorn Auctions evokes a feeling that’s a bit like uncorking your favorite Brunello or single malt Scotch. Inside the walls of the prosaic container (in this case, a nondescript warehouse in Ravenswood) layers of sensory surprise and delight await. On the cavernous second floor, there’s an almost magical sense of discovery: light pours onto glossy, timeworn floors and tall brick walls, while rows of remarkable bottles fill the space and the Unicorn team works closely among them, examining, cataloging, and preparing each one for the next chapter of its journey.

The bottles come from customers in every corner of the country—in many cases internationally. Some arrive one bottle at a time. Others as entire collections. The delicate contents are carefully examined, authenticated, and digitized—all under the watchful eye of the Unicorn video systems to maintain a documented chain of custody throughout the process.

Each bottle then undergoes a full 360 scan using Unicorn’s proprietary AI photography technology. The images serve a dual purpose: they will become exquisitely rendered product detail page images, and they are ingested by artificial intelligence engines to ensure Unicorn’s standards are met. Is the bottle and its seal brand-correct? Is the hue right? Does it conform to all of the marketplace’s standards? (If not, it will quickly end up on the review or reject shelf.) On the walls above all of this careful cataloging, large monitors show auction activity in real time. Think NORAD, but for incoming and outgoing bottles instead of missiles.

“Those are live bids this second,” Mikhaylov says. “So, you can see customers bidding from Michigan, Florida, Wisconsin, New York… [and here are] live inquiries of where customers are looking to sell. Someone from Los Angeles, Tucson, Minneapolis, Philly, Miami, Selma, North Carolina.” Heat maps illuminate in real time, pulsing with life.

Unicorn’s intake process is a feat of choreography and calculation that brings to mind Silicon Valley engineering and Cupertino artistry. It’s not a surprise, because co-founder and CEO Phil Mikhaylov earned his stripes at Uber, where he oversaw partnerships and was an early member of the Uber Eats team.

“Uber is ‘click a button, go anywhere.’ Or click a button and get anything delivered to you,” Mikhaylov says. “I was really into spirits and wine, but I’d go to a liquor store trying to find a certain thing, and they’d laugh me out of the room, being like, ‘Yeah, we don’t have Weller or Pappy. We don’t have this thing.’ But I knew that they had it, or they were playing some funky games.”

At the same time, Mikhaylov was trying his hand at traditional auction houses, and he ran into different stumbling blocks: “They said, ‘Hey, we don’t want your Wild Turkey. We don’t want this thing. We don’t want that. We just want Macallan, Pappy… or the expensive stuff.’”

At this point, the disruptive gears were spinning in earnest. It seemed clear to Mikhaylov that there had to be a better way to serve the needs of the market. It was 2020, the COVID era, and he teamed up with his friend Cody Modeer, a Chicago hospitality veteran and bar owner whose business had been disrupted by the pandemic. They’d seen the same antiquated, fragmented market and shared many of the frustrations that came with it. “We said, ‘Let’s build a modern platform for what we want.’ And so, we launched it.”

Everything Unicorn builds is with the customer voice in mind. They have 100,000-plus customers, and have done more than $250 million in sales in under five years. The growth has been hockey-stick style—$900,000 in year one and on pace for $100 million this year. That scale also brings a broader range of customer needs, pushing the platform to continue evolving.

“If we hear from the customer the same consistent feedback that ‘it would be awesome if you had this thing,’ then we can build it and ship it. The reality is the old world of wine and spirits has no engineering support. I would say we’re a tech company focused on wine and spirits,” Mikhaylov says.

All those customer requests, real-time analytics, and aggregated data tell stories that drive Unicorn’s product innovation. Mikhaylov has marveled at the different consumer behaviors they’re able to witness. “There’s the sippers, the flippers, the people who are ultra enthusiasts and going after the rarest bottles, and the people who are casual drinkers.” Whatever brings someone to the bottle, Unicorn has built a platform for them.

He tells a story that’s emblematic of a customer journey: “When people start out in their wine journey, a lot of them gravitate towards Napa Valley. They like it big and bold, and they know [certain vineyards]. As they refine their palate, they might be going to Bordeaux or Rhone or Italian. So, let’s just say that 10 years ago you really loved California wine. Now you’re really into Burgundy wine. You could sell your California wine and immediately start buying Burgundy wine. That didn’t exist before. The same with spirits. Maybe you used to like scotch, and now you love bourbon. Now you like Armagnac. Now you can sell it, get your money, get whatever else you want. So that’s made it really easy.”

The logistics of all this activity are, of course, far from easy. But the basic mechanic is simple. Bottles entering Unicorn’s system come through Ravenswood for processing and verification, whether they arrive directly or through one of the company’s 12 drop-off locations throughout the country. After a bottle is authenticated and photographed, it is listed for auction within the same week. When the auction ends, purchased bottles move into the winners’ digital collections. From there, buyers can arrange for home delivery or choose to store their bottles in Unicorn’s climate-controlled Chicago vault. They can retrieve bottles for dinner parties or sipping occasions upon request or eventually place them back up for auction. Mikhaylov points out that there are customers with a few bottles and there are some with thousands. That kind of diversity and differentiation is the point.

As Mikhaylov describes it: “When you open the app, you look at exactly what you want, whether it’s a $22,000 bottle, $14,000 bottle, or a $50 bottle.” Alongside the highly coveted items are everyday bottles at the $40 price point. “There are older collectors and a large contingent of Gen Z and Millennial customers. I think the thing that makes Unicorn unique is that 50 percent of our purchases are $100 or less. But there’s also the customer base that every week is buying a $10,000 or $20,000-plus bottle.”

As for the future, Mikhaylov seems focused on wine and spirits, but with an intentionally expanding aperture. Unicorn is already experimenting with auctioning collectibles and ephemera like old liquor advertisements or a Patek Philippe wine opener, and one-of-a-kind experiences like a tasting with Julian Van Winkle or a drink with Jim Gaffigan. They’ve also done numerous charity auctions, raising $800,000 last year by partnering with organizations like the Chicago Blackhawks Foundation.

In the tech world, of course, a unicorn is a privately held company worth a billion dollars. For Unicorn Auctions, the meaning is more personal: a ‘unicorn’ is the bottle or item that means something uniquely to the person chasing it. “For us,” Mikhaylov says, “a unicorn isn’t necessarily the most expensive bottle. It’s the one you’ve been searching for, wherever in the world it might be. Maybe it’s something you’ve been chasing for years, something that just came out, or a birth year bottle as a gift. For us, it’s about opening up the world of collecting and making it accessible. Whatever your unicorn is, it’s within reach.”

Unicorn’s platform is turning a passion for wine and spirits into a more accessible collecting experience, removing longstanding barriers and welcoming newcomers into the world of buying, selling, and collecting exceptional bottles. For Chicagoans, who are no strangers to raising a celebratory glass, that’s a story worth toasting.

For more information, visit unicornauctions.com.