Trove wants its users to get paid for owning digital collectibles.
The New-York-based company launched its digital platform for buying, opening, and trading authenticated trading cards in April. Since then, the platform has experienced “explosive” user growth, according to co-founder and chief executive officer Michael Katz in an interview with GamesBeat. Katz said Trove has seen “triple-digit user growth month-over-month” in recent months, although he declined to share specific figures.
Last month, Trove launched Collection Dividends, a new feature offering members of the platform a two-percent monthly dividend based on the total value of their digital collection in Trove’s vault, which Katz said contains an overall value of roughly $10 million, with an $85,000 Kobe Bryant card as the single most valuable item in the vault. That means Trove is paying out $200,000 to collectors on its platform every month, with the owner of the Kobe Bryant card potentially pocketing a monthly dividend of $1,700 for that item alone. Trove works with the third-party price tracking platform Card Ladder to set and adjust the prices of collectibles in its ecosystem.
“The bet that we’re making is that, by providing more value to the end user than the competition, that they’re going to choose Trove over one of the other guys,” Katz said. “But if it was just about that, and it didn’t really align with our core values around building trust and exceeding consumer expectations, I’m not sure that we would have definitely done it. We have taken into account the brand considerations, vis-a-vis delivering sustainable value to the consumer.”
Trove is part of a rising tide of companies that have arisen to take advantage of consumers’ growing interest in digital collectibles and virtual pack openings, alongside competitors such as Courtyard or CardVault. Unlike the NFT craze of past years, digital collectibles are tied to physical items stored in a central location administered by the trading platform, with users able to cash out on the value of their items or request the physical items via mail. While many of these companies look to emulate different aspects of the physical collecting experience, Trove’s Collection Dividends takes a different tack by offering a feature that is only possible with digital collectibles.
“Digitizing real-world assets was never about creating a substitute. It was about creating a complement, and using that complement to change distribution mechanics,” Katz said. “There’s a number of things that you can do when you combine the digital and the physical that you can’t do when it’s only digital or when it’s only physical. For us, the way that we think about it is we want to create the best of both worlds.”
So far, Trove has raised about $10 million from a mix of venture firms and celebrity investors, per Katz, who said an official fundraising announcement is forthcoming. He said the company, which currently employs 11 full-time staff, has been profitable from day one, with plans to grow further in the coming year in areas like engineering and operations. So far, the platform’s growth has largely been organic, fueled in part by Trove’s sponsorship deals with organizations like the Chicago Cubs. In the coming year, the company plans to ramp up its marketing and user acquisition spend, too.
“You won’t see us dumping a bunch of money into ads, screaming at you to buy a ton from us and making promises that we can’t deliver on,” Katz said. “It’s going to be more about how to create meaningful and sustainable value for our customer base.”