HobbyDB Review and Deep Dive

Hi everyone,

I hope you enjoyed last week’s Deep Dive on investment.com.

Today we’re diving into hobbyDB — the world’s fastest-growing database of collectibles.

Collectibles are some of the most fascinating alternative investments. After an incredible 2020 and 2021, the bubble popped last year across sports cards, comics, video games, and more.

But here’s the interesting thing: nothing fundamental has changed that makes these assets less desirable. For example, searches for Pokemon cards didn’t just hold steady through covid, they keep on increasing.

Meanwhile, interest continues to pour into the space. High-end sports cards are finding a bottom (heck, we snagged this Pele for ALTS 1 ), and high-end comics are rising again.

Bottom line: collectibles aren’t going anywhere.

And if you want to get serious about this stuff, hobbyDB is a company you need to know about. For the past eight years, they’ve built a company with one simple goal: To document every collectible ever made. (No big deal, right?!)

Now, they’re raising a round on Wefunder.

Whether you’re a serious collector, or just like learning about wonderfully obscure & exotic collectibles, this company is for you.

This issue a non-sponsored Deep Dive. We weren’t paid to write this. We just love them.

Let’s go

Summary

  • Type: Priced round fundraiser
  • Who it’s for: Accredited and non-accredited investors
  • Minimum: $100 for real estate investments
  • Pre-Round Valuation: $16.425m
  • Price per share: $0.97
  • Horizon: Long-term (4+ years)
  • Platform: Live now on Wefunder.

How the Internet changed collectibles

Back in the day, if you went to a yard sale to buy something, you could see and touch it. There was no room to hide any flaws.

But we all know sellers can be a slippery bunch. Adjust some lighting here, avoid some angles there, and voila: shady sellers can turn a 7/10 into a 9/10.

The effect of this is double-prong — sellers naturally “over grade” their items, while serious buyers mentally “under grade” listings.

This all makes it harder to value collectibles accurately.

That’s where internet databases come in.

Collectible databases

Years ago, the hobbyist world was filled with amateur price guidebooks bound together by a hole puncher and string.

A famous 1987 guidebook called Modellauto Katalog Siku that is, according to the author, “not very good by today’s standards”. The author is none other than Matthias Braun, brother of hobbyDB CEO Christian Braun.

The Internet eventually decimated the need for physical guides. Just a few years ago, Krause Publications, the biggest player in the space with 4,000+ guidebooks, filed for bankruptcy.

But, paradoxically, the digital era has made it harder to stay on top of this stuff. Niche websites are notoriously unreliable, always at risk of the dreaded “Error 404”. And the collectible website world is rife with ugly design, outdated info, dead links and server issues.

This was a serious problem for collectors. When a website owner stops paying for their site to be running, all that crucial info disappears. People routinely get tired of the upkeep, move on, or even pass away, and suddenly these communities are gone forever.

Even the great Internet time machines can’t bring back forgotten collector resources like this.

What is hobbyDB?

hobbyDB is a community-driven platform dedicated to creating a standardized database for all of the world’s collectibles.

In a nutshell, they want to become the next eBay (but “Amazon-style.”)

The team is on a mission to document over 100 billion collectibles*

caption for image

Jokes aside, they’re off to a terrific start. HobbyDB already has a massive database, and is the world’s fastest-growing collectible database. The site has 500k+ community members who’ve added a whopping 702,154 unique items to the site, ranging from model cars to action figures to comic books to corkscrews.

There’s very little info on how much this Russian Kalinkin corkscrew is worth. But there’s also basically nowhere else on the internet with any reference to this unique piece. That’s the value of hobbyDB.

The way they’ve grown is through consolidation and preservation. The team has already integrated data from 20+ other websites that were at risk of dying, or wanted to join forces.

Contributors have migrated millions of listings from websites like The Toy Collector, Diecastlovers, and the Hard Rock Cafe Pin Database.

hobbyDB has also created a third-party marketplace for serious sellers and collectors to exchange with other enthusiasts (and not the dodgy retailers on eBay). The platform takes a very small 5% cut (less for Shareholders and “Squad Members” – more on these later.)

They want to stay well below eBay’s take rate, and make it up by grabbing marketshare.

The team

hobbyDB is headed by Christian Braun, a long-time collector, and author.

Christian began his love affair with collectibles 40+ years ago when he wrote a book about Timpo toys as a kid. By age ten, he had 8,000 of these toys neatly organized in his bedroom.

Originally from Germany, Christian now lives in Colorado.

He’s dedicated most of his adult life to documenting, preserving, and bringing together a community of collectors. Christian also has an MBA, worked for Bain & Co and General Electric, and founded Europe’s largest eBay business, Auctioning4u.

How hobbyDB works

The basics

Christian Braun and his team do a lot of work behind the scenes. But the fact is that hobbyDB is mostly owned and operated by its members. For the community, by the community.

Voluntary contributors form what is known as a Squad, each with different roles and permissions.

It’s sort of like Wikipedia. Basic Contributors can add price points, pictures, and UPCs to existing items. Creators can add new collectibles and amend an item’s data if wrong.

The top of this totem pole is Coordinators; leaders who are promoted from within the Squad. These guys are the kings of the castle and are responsible for organizing entire categories (like 102,000 pieces of Hard Rock Cafe memorabilia .)

To get involved, users have to contact hobbyDB and let the managers know what collectibles they’re interested in. There’s no payment — the database is built purely by a sense of community and passion.

Again, to reiterate the numbers, this community has uploaded 700k+ collectibles.

To put this in comparison: eBay makes 10 billion dollars a year and still doesn’t have this level of user-generated detail, passion, and trust.

What a terrific community

Official Archives

In addition to massive community support, hobbyDB works with 63 brands, authors and others to bring new collectibles to the database & market.

It calls these relationships Official Archives, where brands rapidly add new items in bulk.

In 2023, hobbyDB plans to add one Official Archive per week

Searching for collectibles

Imagine you’re cleaning your attic and find a Superman action figure. You want to know what it’s worth, but you’ve got no info. No box, no special markings, nothing.

This is exactly what hobbyDB was designed for. You can find almost any collectible imaginable in just a few minutes.

  • Image
  • Dimensions
  • Member rating
  • How many for sale
  • How many wish lists it’s in
  • How many collections it’s in
  • Estimated value (including L/M/H)

It’s all there.

Yes, given the sheer size of the database, it can sometimes be a little slow. But that’s to be expected.

Site design leaves something to be desired, but boy is this one rich database.

Browsing the site is fun. hobbyDB has collectible categories I never knew existed. (Bank memorabilia? Sure! Why not)

When hobbyDB says they want to feature every collectible ever, they ain’t kidding. I honestly couldn’t believe they had a landing page for Wells Fargo memorabilia.

The marketplace

hobbyDB started as a database. But their marketplace is steadily growing, and they have big plans here.

I admit, just scrolling through the market isn’t the cleanest experience. It can be a bit slow to load and clunky. But again, for finding esoteric collectibles to buy, it’s great.

Filters will be your friend

It’s easy to compare hobbyDB to eBay, but they’re different in a few key ways.

eBay has a database of products that map directly to UPCs. But this is problematic, because UPCs don’t always correspond correctly. And sometimes UPCs correspond to multiple versions of the same item! (I know one company that has a single UPC for 17,000 products).

This isn’t a big deal for, say, modern electronics, because the UPC is so heavily baked into the product packaging, is married to other product codes, etc. But collectibles aren’t like that. Tons of them never even had UPCs to begin with!

hobbyDB’s market promises a superior experience for collectors. And sure, it doesn’t have the same volume of items. But what it does have is a tight-knit community of honest people that know what they’re doing. These aren’t folks trying to make a quick buck and run. You aren’t going to get screwed by overpriced collectibles with poorly-reported conditions.

Plus, this is where you’re more likely to find rare, ultra-obscure collectibles with detail and a history. The real fun stuff.

Like this collection of Star Wars Space Punch

The perks of a hobbyDB account

If you’re a collectible enthusiast, the biggest perk isn’t just the database – it’s connecting with people that share your passion.

One of my favorite features is the wishlist. You can add any collectible in the database to your list, and if it pops up on the marketplace… Boom. You immediately get a notification.

Another perk of having an account is being able to track your collections digitally. It gives you an idea of how much your memorabilia is worth, as well as looking pretty cool. It’s called the Showcase, which hobbyDB frames as your “Online Museum.”

In true collectors fashion, you can meticulously organize how everything appears on your Showcase.

The showcase of one of hobbyDB’s most prolific users. That Vegeta Funko Pop is one of the few that are actually worth anything — and it’s jumped from under $100 in 2020 to nearly $300 today.

Mobile app

The hobbyDB app is relatively new and available on both Apple and Android.

To date, it has amassed 220K+ downloads (17k in January alone!) and has a 4.8-star rating on the Apple App Store.

The app doesn’t quite give you all the same features as the desktop version (such as in-app search), though the transition between mobile app and mobile site is pretty seamless, and most users won’t notice a huge difference.

What they’ve done instead is optimize the app to be a barcode scanner.

It works similar to the Discogs app (for all you vinyl heads out there). Just scan a barcode to quickly pull up a collectible’s listing page. You’ll see price history, average selling price and more.

hobbyDB’s app is super useful in thrift shop/yard sales to figure out if a collectible is valuable or, well, crap.

The team also releases a monthly newsletter with data on the most-scanned Funko Pops. January 2023 was a month for the weebs, with 8 of the top 15 collectibles coming from animes (DBZ, One Piece, Cowboy Bebop etc.)

The weird and wonderful world of hobbyDB

HobbyDB has 98,246 subjects to explore. Subjects are basically a brand or franchise; like say, London Underground, or Funko.

Speaking of Funko, hobbyDB’s biggest drawcard is certainly the Funko brand, with nearly 200,000 vinyl pops liked, and 35 million owned, liked, or on a wishlist. (For context, the next most popular brand, Hot Wheels, has 4 million).

One feature I feel that’s missing is the ability to sort by “popularity”. The closest you can get is “top-rated”, but the filter’s slow to run and not relevant to how popular an item is.

Some of the fun things we found include the official Ceasars Palace NES game:

Buy the Ceasars Palace NES game if you want to simulate losing money!

Or how about this vinyl Vladimir Lenin partying it up in a sickly bright yellow coat of paint?

I don’t really get it.

Anyone remember Mattel’s Intellivoice? It lets you “speak” to games to play them. Only five games were ever released that supported the device before it was discontinued.

Banking has its own category, as do Astronauts, Architects, Groups of Species (like Stegosauraus), Theme Parks, Websites, and Music Genres.

How to invest in hobbyDB

hobbyDB is fundraising via a Priced Round on Wefunder.

They’ve already hit their first goal from 95 early investors, but it’s not too late for you to invest.

The minimum investment is only $100.

Investment type

  • Investors are buying a Priced Preferred Shares. The pre-round valuation of the company is $16.425m.
  • Each hobbyDB share is valued at $0.97. For example, $100 would buy you 103 shares in the company.
  • When possible, the team will pay dividends to shareholders.

I think hobbyDB could be ripe for an acquisition someday, potentially by Collectors Universe. If they do get acquired (or go public) shareholders would receive a pro-rata payout.

Previous raises

Interestingly, hobbyDB has a long history of raising money directly from their community. (We know what that’s like!)

Since 2013, they’ve conducted 13 different Priced Rounds raising around $5 million. The biggest raise was in 2017, when the team secured nearly $3m in funding.

Based on these annual priced community rounds, the company has steadily increased their valuation:

  • 2020: $0.60
  • 2021: $0.67 (up 11.7% over prev round)
  • 2022: $0.87 (up 29.9%)
  • Current: $0.97 (up 11.5%)

hobbyDB’s balance sheet has improved in the last 24 months, and they plan to be profitable within three months.

The company signed agreements with Collector’s PSA unit in November and CGC in December and is talking to the other 3 grading companies about similar agreements.

Fundraising goals

hobbyDB’s first goal was $20K – and they have already doubled that. Their max offering is about $500k.

Their base goal was to finance the company’s operations. However, they’ve shot well past this. So here’s how they plan to allocate funds:

  • 15% for building Image Recognition Software (more on this later)
  • 30% for funding 10M+ new database pages
  • 11.2% for UX design improvements
  • 38.3% for financing the company’s operations
  • 5.5% Wefunder intermediary fee

Holding period

Future equity isn’t the most liquid asset. You might be holding onto hobbyDB securities for 5-10+ years (although the team does plan to distribute dividends).

The company is exploring secondary markets for shareholders and hope to open shares on a secondary market in the next 12-18 months.

If an exit opportunity arises (IPO, acquisition or sale of assets), investors will receive a pro-rata payment based on their holdings. (Of course, there’s no guarantee this ever happens.)

Who can invest?

At just a $100 minimum, the barrier to entry is super low here.

Both accredited and non-accredited investors can get involved.

How does hobbyDB stack up?

Liquidity

So-so

This is startup investing. It’s not known for being particularly liquid. You may be waiting 5+ years on this one to sniff a return.

Returns potential

Awesome

According to Christian Braun, the collectibles market is worth $500b+ and comprises 75m+ collectors. hobbyDB hosts just 500K+ users, with their combined collections worth $5.7B. There is a lot of M&A happening in the space, and lot of room to grow here.

Usability

Room for improvement

Look, navigating the site isn’t the best. It’s a bit run-down, and the design looks about ten years out of date. It’s easy to find something if you know what you’re looking for.

But just scrolling to find popular, weird and whacky collectibles is pretty underdeveloped and would give the UX a huge boost.

The mobile app doesn’t have all the same features the desktop version of hobbyDB. However, the scanner feature is an awesome idea that makes the app easily worth it.

And the team is earmarking 11% of funds to improve the UX.

Team

Great

Christian Braun is a collectibles mega-nerd. If you wanted anyone in charge of “cataloging every collectible ever made”, he’s your guy.

Minimum investment

Good.

$100 minimum. Terrific! What else can you say?

Correlation

Not bad.

Collectibles definitely aren’t as recession-resistant as other asset classes. And they sort of fall in line with equities, more or less.

But every collectible asset class is slightly different, and the key here is the diversity. If you’re buying into hobbyDB, you’re effectively buying into a broad basket of collectibles (their goal is to make it the broadest on earth!)

Company performance

Pretty good

hobbyDB has secured half a million users and is the official database for Funko Pops and Hard Rock International. They already have some pretty good brand recognition and earn $400K+ annually from Funko. However, it should be noted they are still operating at a loss and have $100K in debt.

What’s next for hobbyDB?

hobbyDB is always looking to add new features to its web platform and mobile app.

The biggest upcoming feature for me is the app’s Image Matching Software. Using this, you won’t even need to scan a barcode to find an item on the database. Just take a picture, sit back, and let the app figure it all out for you.

They are also proposing “innovative new tech” to let you check out items at physical locations via the app. No idea how this one will work, but it sounds pretty cool.

And there’s more:

  • Translation to multiple languages
  • Advanced searching using descriptive text
  • Dark mode (obviously, this one is a must)
  • Continuing to make the site faster
  • Adding a trading mechanism

hobbyDB is a big database with big dreams.

The team has the dedication and passion to keep working and improving this project. And with the help of their equally-passionate community, hobbyDB has already become a significant cultural artifact.

Documenting every collectible ever made is a moonshot of a goal. But if anyone can do it, it’s these guys.

Disclosures

  • We were not paid to write this issue on hobbyDB
  • We do not own any shares of hobbyDB through ALTS 1
  • I am personally considering investing in hobbyDB’s round via Wefunder

This issue is a non-sponsored deep dive, meaning Alts has not been paid to write an independent analysis of hobbyDB. HobbyDB has agreed to offer an unconstrained look at its business & operations. HobbyDB is not a sponsor of Alts, our research is neutral and unbiased. This should not be considered financial, legal, tax, or investment advice, but rather an independent analysis to help readers make their own investment decisions. All opinions expressed here are ours, and ours alone. We hope you find it informative and fair.

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Author

Stefan Von Imhof

Stefan Von Imhof

Stefan lives and breathes asset analysis and valuations. Before co-founding Alts, he created a Due Diligence Service for evaluating website & micro PE deals. In his spare time he enjoys record collecting and managing his short-term vacation rentals. Originally from Boston and later Santa Barbara, CA, he now lives with his wife in Australia.

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