We’ve written a few times about Alt, a platform that helps trading card collectors (think Pokémon, NBA, NFL, etc.) to research, buy/sell, and securely store valuable cards. This week, after a few months of quiet testing, the company announced a new product: Alt Advance.
The idea? If you have rare/valuable trading cards stored at Alt, they want you to borrow money against them. Alt has insight into how much a given card collection is worth (and how much its value fluctuates over time) and already offers secure card card storage as part of its other products, putting them in a unique position to do something like this.
“Now if you have stocks, bonds, real estate, or even crypto, it’s very easy to take your assets with you, put them somewhere they’re kept, and get a loan for them,” Alt founder Leore Avidar tells me. “We want to do exactly the same.”
In the early testing phase, Alt funded the loans from its own balance sheet; as it begins to scale the product, the company has entered into a $200 million debt line with alternative investment consultancy Atalaya.
To be clear, the process here is a little more complicated than saying, “Hey, I’ve got a first-generation Charizard in a box somewhere. Money please!”
First, you’ll need to have your card(s) reviewed by a group such as PSA or BGS – a process that helps verify its authenticity and examine it for even the tiniest flaws.
Once rated, you can send cards to Alt’s Vault – a fully insured and “temperature, humidity and lighting controlled” facility to keep cards safe.
Once vaulted, a card is added to your Alt portfolio – after which it can be displayed as part of your verified collection, sold on the Alt exchange or, now, borrowed.
Alt says they currently allow collectors to borrow up to 40% of their portfolio’s value for up to 12 months at 9-10% annual interest. The company notes they see people largely using this liquidity for shorter-term loans — think bridging loans to secure a real estate purchase — so they’re allowing them to be paid off early at no cost. As for the size of the loans we’re talking about, the team says they’ve already funded loans across the gamut from “very small” to the “mid-single digit millions.”
Alt rolls out their loan product by state, as loan rules vary by region. They tell me they can offer Alt Advance in about 30 states right now and they expect it to go live in the rest of the states by the end of the year.
Eventually, Leore notes, Alt may expand into “alternative assets” other than trading cards (think luxury watches, sneaker collections, etc.), but he’s in no rush.
“We have a very focused approach – we are building market share in trading cards. Until we are a top player, you will not see us in any other asset class,” says Leore. “We want to win in one thing.”
“When I Built” [Alt], this was like the main product I wanted to have,” he adds. “I have now invested in over 50 companies, I own crypto, I own cards… none of these, if you go to a traditional bank, have ever been able to get collateralized loans. I’m really fighting that. I know the world is moving more and more towards those alternative assets. I want to be the company where we understand those assets, and I really believe that’s the future.”
Alt has raised $106 million in venture capital to date, backed by BoxGroup, Spearhead and Alexis Ohanian (by way of 776) – plus a number of professional athletes, including Tom Brady, Kevin Durant and Candace Parker.
This post Alt is going to borrow to let you borrow money against your collection of trading cards – TechCrunch
was original published at “https://techcrunch.com/2022/07/20/alt-gets-into-lending-to-let-you-borrow-money-against-your-trading-card-collection/”