Joel Belfer’s monthly “Mint Condition” newsletter offers perspectives on the business side of the hobby.
Over the last few weeks, there have been a couple of big announcements from key companies across the hobby. This edition of Mint Condition will be a ‘quick hitters’ of sorts where I give my take on each of them.
Let’s get into it…
Goldin launches new marketplace and weekly auction, along with acquiring of Sell My Comic Books
Although several recent startups have launched business models with a marketplace dynamic, I’ve been waiting for a larger, established player to try its hand at this idea. Someone like Goldin inherently has a higher probability of being successful in what I suspect is an attempt to dethrone or steal share from eBay. Because Goldin already has a vast base of users of its auction services and as part of the larger Collectors umbrella, it is more likely an existing user of other Collectors / Goldin services will simply add on use of the marketplace rather than a collector adopting an entirely new company’s marketplace. This is more efficient and scalable than a startup looking to build clout from scratch. All of this is to say that Collectors, among other companies like Fanatics, are looking to build an ecosystem for collectors.
As CEO Ross Hoffman stated on LinkedIn, Goldin is looking to build a “unified grade-to-vault-to-marketplace platform experience” in order to save users both time and money. As I’ve stated before, the longer a company can keep cards in its ecosystem, the more valuable and revenue-generating that card and collector will be for them. This announcement is just another link to that chain. It will be interesting to see how the actual rollout and performance of the marketplace and weekly auction goes. A few other platforms, like Alt, have introduced similar concepts, though reviews across the hobby have been mixed. If one thing is for certain, the feedback loop within the hobby is short and Goldin will know quickly after launch whether users enjoy their new offerings.
One question that a lot of hobbyists have brought up to me is, “what about conflict of interest?” What they mean by that is, for example, since the Goldin marketplace will generate increasingly more revenue as more valuable cards are sold, couldn’t they hypothetically ensure cards on the grade-to-marketplace path attain the highest possible grade in order to drive higher sale prices? Since PSA is owned by Collectors, isn’t there an inherent conflict of interest issue? In theory, yes, but as Collectors has stated multiple times, each division maintains its independence and they’ve pledged such funny business will not occur. At this point, I have no reason to believe Collectors isn’t telling the truth. Of course as a private company, it is faced with less scrutiny than as a public company. Assuming Collectors is taken public again in the next 2-3 years (just my guess), the company will have to be more open and explicit about these business dealings, which will provide greater transparency to the hobby.
Goldin’s acquisition of Sell My Comic Books (SMCB) seems like an attractive, classic play here. SMCB maintains leadership in a niche market — buying and appraising comic books — and realized that it could grow faster and scale more successfully by partnering with Goldin rather than going at it alone. Goldin continues to add these types of businesses to its portfolio in order to expand its expertise in burgeoning end markets and cross-sell SMCB’s users all of Collectors’ additional services, like grading and vaulting, to increase their generated revenue. A win-win for both sides.
Collectable announces new partnership with eBay
Beginning with Art Basel in Miami, where a number of events like a high-end collectors dinner and a “Culture is Collectable” party were held, Collectable and eBay are teaming up in a multitude of different areas. Of course eBay was a presenting sponsor of the MINT Collective in 2022 (and this coming year’s), so the relationship between the two companies runs deep. Collectable will be placing graded cards valued at $5 million in eBay’s vault and the pair will be curating a high-end auction at the 2023 MINT Collective.
The partnership benefits both sides. For eBay, it further cements how serious it is attempting to push into the collectibles space. From launching vaulting services to sponsoring events and now partnering with Collectable, eBay is expanding its presence in the hobby world and trying to buck the notion that it’s just a marketplace. For Collectable, partnerships with large players provides support for the fractional space, which is important for the industry’s and its own growth. Additionally, it will be interesting to see whether any integrations of sorts are seen between platforms. Could buyers / sellers on eBay be presented with an option to list their card on Collectable? Will eBay inform all users who have cards in its vault that they can now seamlessly sell a fraction of their cards on Collectable? If Collectable is able to convert users from eBay to sell on its platform and buy into IPOs and on the secondary marketplace, it would be a boon for the company.
Arena Club announces $10 million fundraising round led by M13
Arena Club, a provider of machine learning-powered grading, vaulting, and marketplace services, announced it raised an additional $10 million, just months after launching with $10 million in funding in September. As the VC firm that led the round, M13, states, “Arena Club is building a platform that reimagines how sports cards are traded and collected by providing consumers with the first online card show experience and enabling a bridge between the physical and digital worlds of sports collecting.”
With $20 million in its coffers, a multi-time founder, Brian Lee, at its helm, and a recognizable face supporting the team, Derek Jeter, the company has significant momentum. Although too early to say whether or not Arena Club will ultimately be successful in its quest, early reviews from around the hobby indicate that users enjoy the platform. It will be important to monitor what type of development occurs there and what kind of scale in user base the company achieves over the next 6-12 months. A marketplace is only as successful as the number of users it has and how liquid it is, and it is more difficult for a new company to achieve scale as compared to an existing player (see discussion above about Goldin), so I am intrigued to see how Arena Club fares.