Collectibles trading app Rally announced Monday it closed a $30 million Series B funding round with a plan to expand its product offerings of alternative assets and build out infrastructure. The ultimate goal: make everything a tradable asset.
“There are multi-trillion dollars worth of assets that are tied off and traditionally illiquid,” said Rally CEO George Leimer. “I think we can make them liquid. If it is something that people are passionate about and want access to, there is no reason you can’t give them access.”
Rally has grown far beyond its roots of fractional ownership in classic automobiles when it launched in late 2016. It now has assets on the market in 15 categories—up from five a year ago—and plans to use the new funding to tap income-producing assets like intellectual property and real estate.
Fans, collectors and traders have flocked to Rally with the new categories—more joined the platform in the first quarter than all of last year combined. Transaction volume was up 450% in the first three months of the year compared to a year ago, as trading by a new breed of investors boomed on platforms like Rally, Robinhood and WeBull.
Rally spent $156,000 in February on a pair of LeBron James’ high school game-worn sneakers that were a gift from Kobe Bryant. The patriotic-themed “USA” Kobe Twos will hit the app on Friday at a $10 share price. The 18,000 shares will result in an initial market cap of $180,000. Like all Rally assets, the shares will open for bid/ask trading on the platform through a registered broker-dealer after a 90-day lockup. The company wants to enhance the trading experience with real-time trading of all assets by the end of the year.
Sports memorabilia are a significant piece of Rally’s business, but you can also find Isaac Newton’s Principia, a lunar meteorite and dinosaur fossils among the 300 assets currently trading or coming soon. The latest big-ticket item: one of an estimated 20 privately owned copies of the Declaration of Independence that cost the platform $2 million. Rally just secured a $50 million debt facility from Upper90 Capital that will allow the company to acquire more seven-figure assets.
“There are three criteria we look at for assets,” said Leimer. “It has to be interesting, high value, and something the average person typically would not be able to access.”
Leimer says the company currently has $30 million in assets under management with a target of $75 million by year-end. There are more than 200,000 users on the platform, and the average age is 28 years old. There have been 10 “exits” where an unsolicited buyout offer for an item was approved by shareholders. The biggest return on an exit was 106% in less than two months for a 1958 rookie trading card of soccer legend Pele.
The Series B funding round was led by Accel, the Silicon Valley venture capital giant that was an early backer of Facebook. Existing investors, Upfront Ventures and Social Leverage, also were part of the Series B. Rally has now raised more than $50 million, including investments from rapper/venture capitalist Nas and Reddit co-founder Alexis Ohanian.
“Rally is a true pioneer,” said Accel partner Ryan Sweeney in a statement announcing the news. “The company has created and scaled an entire industry, unlocking a market for retail investors to access blue-chip collectibles, regardless of socioeconomic status.”