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We’ve written about it a few times Old, a platform that helps trading card collectors (think Pokémon, NBA, NFL, etc.) research, buy/sell, and safely store high quality cards. This week, after a few months of silent testing, the company announces a new product: Alt advance.
The idea? If you have rare/valuable trading cards stored at Alt, they want you to be able to borrow money against them. Alt has insight into the value of a given card collection (and how much its value varies over time) and already offers secure card storage as part of its other products, putting it in a unique position to do so.
“Now, if you have stocks, bonds, real estate, or even crypto, it’s very easy for you to take your wealth, deposit it in a place that holds it, and get a loan for it,” says alt-founder Leore avidar. “We want to do exactly the same.”
In the early testing phase, Alt funded the loans from its own balance sheet; Now, as it begins scaling the product, the company has closed a $200 million line of credit with an alternative investment advisory firm Atalaya.
To be clear, the process here is a bit more complicated than saying, “Hey, I’ve got a Gen 1 Charizard in a box somewhere. money please!”
First, you need to have your card(s) appraised by a group like PSA or BGS – a process that helps verify authenticity and examine cards for even the tiniest mistakes.
After grading, you can send cards to Alt’s vault — a fully insured and “temperature, humidity and lighting controlled” facility for secure card storage.
After the vault, a card will be added to your alt portfolio – at this point it can be viewed as part of your verified collection, sold on the alt exchange, or borrowed now.
Alt says they currently allow collectors to borrow up to 40% of the value of their portfolio for up to 12 months at an annual interest rate of 9% to 10%. The company finds that people use that liquidity mostly for shorter-term loans — think bridging loans to secure a home purchase — so they prepay them with no fees. As for the size of loans we’re talking about, the team says they’ve funded loans ranging from “very small” to “mid single-digit millions.”
Alt is rolling out its lending product state-by-state because lending regulations vary from region to region. They tell me that they currently have Alt Advance available in about 30 states and expect to have it live in the rest of the states by the end of the year.
Eventually, Leore notes, Alt may expand into other “alternative assets” beyond trading cards (think luxury watches, sneaker collections, etc.), but he’s in no rush.
“We’re taking a very focused approach – we’re building market share in trading cards. Until we’re a top player, you won’t see us in any other asset class,” says Leore. “We want to win one thing.”
“When I built [Alt], which was kind of the key product I wanted,” he adds. “I’ve invested in 50+ companies now, I own crypto, I own cards…none of those if you go to a traditional bank have ever been able to get secured loans. I’m really fighting it. I know the world is moving more towards these alternative investments. I want to be the company where we understand these values and I believe that is where the future lies.”
Alt has raised $106 million in venture capital to date, backed by BoxGroup, spearhead and Alexis Ohanian (via 776) — as well as a host of pro athletes, including Tom Brady, Kevin Durant, and Candace Parker.
