We have written several times about Other, a platform that helps trading card collectors (think Pokemon, NBA, NFL, etc.) find, buy/sell, and securely store high-value cards. This week, after a few months of silent testing, the company announces a new product: Alternate Advance.
The idea? If you have rare/valuable trading cards stored with Alt, they want you to be able to borrow money against them. Alt has an idea of how much a given collection of cards is worth (and how its value fluctuates over time) and already offers secure card storage as part of its other products, which puts them in a unique position. to do something like that.
“If you have stocks, bonds, real estate, even cryptos now, it’s very easy for you to go and take your assets, deposit them somewhere that keeps them, and get a loan in return,” me says Leore Avidar, founder of Alt. “We want to do the exact same thing.”
In its first phase of testing, Alt financed the loans from its own balance sheet; now that it is starting to develop the product, the company has secured a $200 million line of credit with an alternative investment consultancy Atalaya.
To be clear, the process here is a little more involved than saying “Hey, I have a first-gen Charizard in a box somewhere. Money please!
You must first have your card(s) appraised by a group like PSA or BGS – a process that verifies authenticity and examines cards for the slightest flaws.
Once rated, you can send cards to Alt’s Skip — a fully insured and “temperature, humidity and lighting controlled” facility for storing cards in a safe place.
Once vaulted, a card is added to your Alt wallet – at which point it can be presented as part of your verified collection, sold on the Alt exchange, or, now, borrowed against.
Alt says they will 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 notes that it sees people using that cash largely for short-term loans — think bridge loans to help secure a home purchase — so they allow them to be prepaid at no cost. In terms of the size of the loans we’re talking about, the team says they’ve funded loans across the gamut, from “very small” to “mid-single-digit million”.
Alt is rolling out its lending product state by state, as lending regulations vary by region. They tell me that they are currently able to offer Alt Advance in about 30 states and expect it to go live in the rest of the states by the end of the year.
Eventually, Leore notes, Alt could expand into other “alternative assets” beyond collectible 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 collectible cards. Until we’re a top player, you won’t see us in another asset class,” says Leore.” We want to win in one thing.”
“When I built [Alt], it was like the key product that I wanted to have,” he adds. “I have now invested in over 50 companies, own crypto, own cards…none of these, when you go to a traditional bank, have ever been able to get secured loans. I am really fighting against this. I know the world is moving more towards these alternative assets. I want to be the company where we understand those assets, and I believe that’s where the future lies.
Alt has so far raised $106 million in venture capital, backed by group of boxes, Spearhead and Alexis Ohanian (through 776) – plus a number of professional athletes, including Tom Brady, Kevin Durant and Candace Parker.