LYQD Cask Exchange: A platform geared to support the rise in Irish whiskey
Whiskey has become a big business in recent years, and James Jardella intends making it more accessible and transparent for investors.
Along with his partner Ernest Cantillon, their LYQD Cask Exchange platform is designed to open up an industry steeped in tradition, created to capitalise on the boom in Irish whiskey over recent years and the dozens of new distilleries now operating across the country.
'As it stands today, there isn't a single centralised exchange for cask whiskey anywhere in the world,' Chief Executive Jardella explains.
'This restricts liquidity, limits the flow of capital into the industry and reduces the potential returns for cask owners through a lack of pricing transparency. Our aim is to change that,' he says.
The startup has already raised €1.2m in seed capital to secure its launch later this year, leaving €250,000 still available to investors in the current funding round.
This is a limited-time opportunity to invest in LYQD at the maximum 50% Employment Incentive Investment Scheme (EIIS) tax relief rate in Ireland.
KPMG found that whiskey is the most popular form of luxury asset, ahead of art, jewellery and wine.
Backed by Enterprise Ireland's High-Potential Start-Up (HPSU) programme after an exhaustive investigative process, LYQD Cask Exchange will operate as a secure and transparent platform for trading Irish whiskey casks and bulk.
'The initial response from investors has been extremely supportive and I'm really impressed by the eco-system in Ireland that surrounds new businesses,' Jardella said.
'Irish whiskey has seen strong growth over the past decade, but the traditional cask and bulk whiskey market remains fragmented and complex. This funding milestone will enable us to bring a much-needed solution to the market.'
Investing in an asset primed for growth cask
Whiskey is a valued asset, with an estimated 44 million casks worth €79 billion currently stored for ageing worldwide.
Historically cask whiskey has been shown to appreciate in value at 12% to 18% per year with the potential for inflation beating returns making it an increasingly popular alternative asset.
'Cask whiskey, unlike other assets, typically appreciates over time rather than depreciates the longer the whiskey spends in a cask, the rarer it becomes and it's flavour profile is enhanced,' Jardella explains.
'The LYQD Cask Exchange marries an age-old asset with modern technology to improve outcomes for people who are trading whiskey, be they distilleries, wholesalers or individual cask owners and investors.'
KPMG recently surveyed hundreds of high-net-worth individuals and investment advisers to discern attitudes and knowledge of whiskey as an investment class.
It found that whiskey is the most popular form of luxury asset, ahead of art, jewellery and wine with 27% of respondents indicating that they are planning to invest in whiskey within the next 3 years.
Historically cask whiskey has been shown to appreciate in value at 12% to 18% per year.
The volume of global sales of Irish whiskey increased by 100% from 2014 to 2024, making it the fastest growing spirits category in the world.
This growth is driven by a confluence of trends, including young adult drinking habits, the growth of the middle class in developing countries, and renewed investment in Irish production.
An appreciating asset guided by trust & transparency
The funding of the LYQD Cask Exchange comes from a variety of mainly Irish sources, including private investors, Enterprise Ireland and a prominent family investment office.
The imminent launch of the platform is significant given the potential reintroduction of US tariffs on European alcohol, with Irish distilleries facing renewed uncertainty around exports exploring new ways to reach consumers and maintain production levels.
'For investors, this could present attractive opportunities to enter the whiskey market at favourable valuations.'
At the same time, a recent BBC Disclosure programme into the mis-selling of Scotch whisky casks has put a spotlight on the need for greater transparency in alternative asset trading.
While similar issues have not been reported in the Irish market, LYQD's platform will allow only authenticated casks be listed thus ensuring safer and more reliable transactions.
'LYQD will make transactions smoother, safer, and more accessible for all stakeholders.' The platform has been further bolstered by the arrival to the team of investor and advisor Tim Murphy, former MD of BNY and CFO of Waystone.
In addition, Ronan McDonnell, experienced CTO leads the area of technology innovation to LYQD. All of which boosts the firm's credentials for investors.
Trust is a key driver underpinning the LYQD Cask Exchange. The ability to trade safely requires verification to ensure all people on the platform have gone through the necessary checks and balances.
'Trust as a business is earned through transparency by showing origin, pricing, and ownership history. That is how we plan to build trust and through good user experience over time.'
Artificial Intelligence will also play a role in the platform navigating data to help investors learn about whiskey and understand the price position of an asset at any given moment.
'AI should be able to help with decision making, not replace it,' Jardella explains. 'We're already on our AI journey but it will need to be able to deliver value for people before it becomes a core functionality.'
As LYQD Cask Exchange embarks on its mission to democratise the whiskey market, James Jardella remains focused on bringing investors the opportunity for growth in an asset whose value increases with age.
'Whiskey is valued for rarity and taste - a tangible asset for people to invest in. People like investments they can relate to, and whiskey is ripe for that.'
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