A cancer diagnosis pushed Brandon Aversano to visit Jeweler's Row and cash-for-gold stores in an attempt to trade in jewelry he had inherited to help pay for medical expenses. What he found was a "miserable experience" fraught with lowball offers and hardball tactics.
Aversano saw an opportunity to make the process of appraising gold and silver more friendly, transparent and tech forward.
He launched his startup Alloy in June to do just that and recently raised an $800,000 seed round to scale operations and continue the platform's "explosive growth." Aversano, who classifies his current cancer status as "active surveillance," is looking to use the influx of cash to quadruple headcount in 2024 and turn Newtown-based Alloy into a go-to platform for buying and selling gold and silver.
Alloy's app allows users to get near-immediate appraisals on their jewelry by entering basic information like the weight and purity of the pieces. They can then request a kit to mail their jewelry to Alloy to be formally examined by an appraisal team, and an offer is made in days. Alloy has contracts with two of the largest precious metal refineries in the U.S. that then purchase the jewelry in bulk.
"We've introduced tools in the industry that never existed before in our pursuit of transparency," said Aversano, who previously held positions at Deloitte, JetBlue Airways and JPMorgan Chase & Co.
The in-app appraisal process gives customers the approximate worth of their pieces immediately, rather than dealing with pawnbrokers or jewelers who Aversano said can "bully" customers into trading their pieces for less than they're worth. While there are websites that calculate the value of gold or silver, none tell customers approximately what it would offer for their jewelry before they trade it in, Aversano said. A similar platform, Worthy, strictly focuses on diamond exchanges, but Aversano claims Alloy is the first "scrap metal appraisal app" focused on gold and silver jewelry.
Alloy is tracking to do "well over" $1 million in revenue in its first full year since launch and could hit $1.5 million if its growth rate continues, Aversano said. After that, projections have the company at $10 million in its second fiscal year and $20 million in Alloy's third year, the CEO said.
Though Aversano originally had no plans to bring in outside investors, that quickly changed when the Newtown startup doubled its monthly revenue from November to December.
"I realized that based on the marketing budget, based on our growth, based on our traction and profitability, it would be extraordinarily challenging to keep pace with growth without soliciting and closing an investment," Aversano said. "So the investment is totally going towards growth in scale."
Alloy's funding round comprises $550,000 from angel investment firm Unity Holdings and another $250,000 via convertible notes.
Alloy currently has five full-time employees, and Aversano wants to have at least 20 by the end of 2024. A number of those additions will be in marketing, where Aversano said the startup has had a "shoestring budget," but is also being guided by some industry leaders.
Alloy recently nominated to its board Elizabeth Windram, who was previously vice president of marketing for JetBlue and chief marketing officer for Uber and is now an executive vice president for Clear Secure Inc. Additionally, a lead investor for the seed round was Linda Lai, the founding chief marketing officer for Ruggable, which creates washable and sustainable rugs and skyrocketed to popularity during the pandemic. Also advising Alloy is former Disney executive Dan Romine and former JetBlue General Counsel Jim Hnat, who sits on the startup's board.
That guidance, along with what Aversano hopes is a pipeline of commercial partnerships coming in 2024, will continue to expand Alloy's visibility, brand and reach.
By mid-2024, the startup plans to be not just a buyer of jewelry, but a seller as well. When Alloy receives jewelry in good condition, rather than turn it over to be melted, it will list it at a small markup for other customers to buy. Aversano said playing both sides of the industry and making Alloy a true marketplace was the "original vision."
"We knew that from a cash flow perspective, and even an inventory perspective, we had to start with the buying, and really kind of establish ourselves in that space as a reputable, legitimate, trustworthy buyer, because then that reputation would carry over to the selling part," Aversano said.
