Invest in a space rocket? The startups looking to democratise 'rare asset' investing
Two app-based startups, Konvi and Koia, are pinning their hopes on democratising the world of rare asset investing, usually the preserve of the mega rich.
Have some spare funds but the stock market volatility or the crypto rollercoaster not for you!
Then how about investing in a super-rare Cartier watch or a rarefied bottle of whisky? Or, in future, perhaps a space rocket?
Two app-based startups, Konvi and Koia, might be the answer, as they are pinning their hopes on democratising the world of rare asset investing, usually the preserve of the mega-rich.
Berlin-based Konvi and Estonia-based Koia not only have similar-sounding names but both were set up within the last two years and both have recently undertaken funding rounds: Koia nabbing $1.4m and Konvi bagging $900,000.
Konvi buys and sells rare assets, like rare watches and valuable art, through partners so investors can invest in a proportion of them, hopefully seeing the value of the collectables go up.
Koia offers a similar fractional ownership investment opportunity by using NFTs to fractionalise expensive watches and whisky.
They make money by fee charges: Konvi takes a one per cent fee on those investing between €250 and €999 while Koia takes a seller fee, trading fee and a buyer fee.
AltFi caught up with two of the founders: Lena Sonnen, co-founder, Konvi and Iris Ten Teije, co-founder, Koia.
How many investors are using your platform? How much are they typically investing? Are investors a particular demographic?
Sonnen says Konvi has registered users in the “five-digit range” but the startup is not sharing exact numbers.
She says: “Investors are mainly from Germany, Italy and France, predominantly male Gen Z and Millennials with previous investment experience in stocks and crypto.”
Ten Teije says Koia is still in the launch phase with its first asset sale happening on April 4.
She says its members are generally between 30 and 45 and are “knowledgeable” about investing
She adds: "Most of our users also have an interest and passion for the assets, e.g. a typical user case might be someone who likes watches and found out about us because of a feature on a watch website.”
Are any assets proving particularly popular?
Sonnen says Konvi’s sweet spot is “super rare investment-grade watches worth more than € 150,000 at the moment”.
For Koia, it’s watches, whisky and art that investors are most interested in.
What evidence is there that investors will get a good return on your platform?
Sonnen says Konvi’s asset suppliers are the “leading investment vehicles” for alternative assets in the world, pointing to 20 per cent gains a year on rare watches.
“The minimum investment amount to invest with these investment vehicles directly is starting from £25,000 - £250,000," says Sonnen.
"It's out of reach for normal retail investors and is exactly the problem we're solving at Konvi: to open these high-performing asset classes to any retail investor.”
Ten Teije admits that it takes time for the assets it’s focusing on to have the potential to appreciate in value.
But she said a watch it’s about to drop on the platform, a fully-stickered Rolex GMT Master-II, Pepsi, has appreciated 74 per cent in the secondary market since 2019.
Why would investors come to your platform? Are they not all going to Robinhood and trading platforms?
Sonnen says Konvi users want to diversify their portfolio and invest in “cool” things that hold real value and have a “more stable value development”.
But she points out that Konvi is a compliment to trading platforms, not a competitor.
“As alternative assets such as rare watches, fine wine, whisky and co have a very low correlation to mainstream assets like stocks, bonds and crypto, they are the ideal addition to everyone's portfolio to diversify and ideally protect oneself in times of crises,” she says.
Ten Teije agrees, saying: “Alternative assets are a great way for people to invest in what they understand and are passionate about, which can simply be a more fun and engaging experience.
“Secondly, alternative assets are a great way to diversify a portfolio and lower volatility. We see users use Koia in addition to the existing crypto and stock trading apps they already use.”
What else is planned for the next 12 months?
Sonnen says Konvi launched its first NFT just days ago, which could be purchased by investors in a “super-rare” Cartier watch, one of only 15 in the world.
She says: “So we allowed shareholders of this watch to acquire one out of 15 watches NFTs (which are digital watch assets with some features inspired from the real Cartier watch model).
“The 15 NFTs were sold out super fast and NFT-holders will enjoy benefits like priority access rights, event invitations, beta access etc.”
Ten Teije says that later in the year Koia wants to create a secondary market to make it easier for investors to sell their investments directly from the Koia app.
"In addition, we are excited to source unique and ultra-rare assets with cultural significance as we scale up throughout the year,” she adds.
“Longer-term, this could mean anything from a SpaceX Starship, a sports team or the world’s most expensive car; we want to empower our community to come together and fractionalise anything.”