CollX has closed on a $5.5 million seed round as the sports trading card startup nears the top of the charts among all sports apps.
The round was led by Austin-based Brand Foundry Ventures, with participation from Next Coast Ventures, FJ Labs, 114 Ventures, Ben Franklin Technology Partners and Morrison Seger Venture Capital Partners. Angel investors in the company include David Adelman, the founder of Darco Capital and co-owner of the 76ers, as well as Nat Turner, the CEO of leading collectible company Collectors Universe.
"Getting folks on board who know this industry quite well is a validation of everything we’ve been doing and they continue to see the new growth we've had," said CollX co-founder and CEO Ted Mann.
The Philadelphia-based sports card startup allows users to scan their trading cards and, using computer-vision AI technology, searches through a database of millions of cards to tell users how much their card is worth. Some 100 million cards have been scanned to date.
CollX now has 623,000 users, a 56% increase from 400,000 just three months ago. Mann projects to be at 2 million users by the end of 2023. Over the weekend, CollX also reached No. 3 on the Apple App Store's top sports apps, trailing only the NBA's and ESPN's live game score apps.
Its recently launched a "deals" feature, allowing users to negotiate and purchase cards from other users on the app, has seen significant growth and will be a major source of revenue moving forward, Mann said. The deals feature has now facilitated over $50 million in deals, double what it had as of November.
The seed funding will in part go toward building out the "deals" feature into a full-fledged marketplace. CollX will act as a middle man in the process, holding money until physical cards change hands and also handling shipping, as well as taking a commission, Mann said.
"The big bet is there’s a lot of collectors who have trading cards and are curious to know what they’re worth," Mann said. "There's an opportunity to really expand the secondary market. All those people with a shoebox of cards at home want to figure out a way to find out what they’re worth."
Some collectors have shoeboxes bigger than others, and CollX wants to cater to those premium collectors as well. The fresh funding will also go toward building out CollX Pro, a premium tier for what Mann called "power collectors." The premium tier is expected to roll out soon but Mann didn't give a specific timeline.
Last June, CollX acquired Denver-based Card Dealer Pro, which allows professional card dealers and stores to inventory their cards using visual search AI. That is another area of growth the company is eyeing. Mann said the goal with Card Dealer Pro would be to advance the software so dealers can cross-list their inventory across marketplaces, like eBay and CollX.
"CollX has grown to become a force in the hobby [industry] in a very short period of time,” said Wesley Gottesman, a principal at Brand Foundry, in a statement. "The secondary market for cards is big, but we see an opportunity for it to grow 2 to 3x. And CollX will be at the center of that, helping collectors level up in the hobby."
