The App That Lets You Buy Ferraris and Jaguars for $50 Just Raised $7 Million. And It’s Blockchain Ready
Luxury cars can be a lucrative investment. Earlier this year, a 1962 Ferrari 250 GTO was auctioned off for $48.4 million at Sotheby’s. It looked to be a sizable winning for its previous owner, an early Microsoft employee who purchased the vehicle in 2000 when such a car commanded a value of about $10 million.
More investors are betting that the average Joe may also want a piece of those profits. On Thursday, New York City-based Rally Rd. raised $7 million in Series A funding led by Upfront Ventures, adding to another $2.9 million seed round.
Here’s how it works: Rally Rd. curates a selection of vehicles with potentially high returns and lists it on their app (which has received approval from the Securities and Exchange Commission). There, users can spend as little as $50 for a piece of a Jaguar or Ferrari.
With the fresh funding, the startup plans to expand the model to assets such as high-end memorabilia, a market that includes items such as Babe Ruth-signed baseballs. Beyond that, Rally Rd. is also looking into other fields such as music, the arts, and into publishing rights.
“We’re looking at any field that has a high interest level, that has driven big returns and have big fan bases, but doesn’t have access to the market in a real way,” said Rally Rd. Co-Founder and Chief Product Officer Rob Petrozzo.
The idea behind Rally Rd. may also sound familiar to those in the blockchain space. Proponents of the technology, which is a decentralized ledger of transactions, have often pointed to the benefits of placing and even trading assets on the blockchain. In theory, doing so would speed up trades while ascertaining ownership of assets such as artwork, which has been stolen.
At one point during the firm’s creation in late 2016, Petrozzo and Bruno say they considered applying blockchain technology to Rally Rd. “As we launched the platform, we evaluated the idea of going on the blockchain immediately,” said Bruno. But they ultimately decided that the technology was too young, the regulation too sparse, and that it was something of a “solution looking for a problem,” he said.
To be clear, the firm is full of crypto fans: All three founders including Chief Financial Officer Maximilian Niederste-Ostholt own some form of cryptocurrency. And in a bid to keep the team humming, Rally Rd. was forced to confine all talk of digital currencies to the ten minutes between 10:50 a.m. to 11 a.m.—though that was at the peak of crypto mania late last year when the value of Bitcoin was still in the quintuple digits.
Even now, the company believes in the technology and is in a sense, prepared when and if blockchain technology makes a breakthrough and becomes scalable. The founders designed the platform in a way that would allow it to port.
“It’s a very easy switch for us, if and when the tech starts—and if there’s a way not to alienate investors, and not alienate customers,” Bruno said.
But for now, the company can and is expanding without blockchain.
Today, roughly 50,000 investors trade over Rally Rd.’s 12 cars which are worth an aggregate $3 million.
The firm’s founders plan to push the number of cars trading up to about 100 by the end of 2019. It’s also planning to open a show room in New York City—raising awareness of the company. Rally Rd. cars are currently housed in a climate-controlled warehouse in Pennsylvania, where vehicles are guarded by 24-hour security cameras and serviced by a concierge.