What was once considered a quirky hobby for shoe enthusiasts will now be a $6 billion market by 2025. We're talking about sneaker resale - and students out of UC Berkeley are building an investment thesis around it.
⚾ The Elevator Pitch:
Sneaker resale was once a side hustle for solo entrepreneurs, but the market has grown into a multi-billion dollar business. sneaker demand builds up as manufacturers, like Nike, produce sought-after shoes that sell out within seconds. Enter The Hype Fund.
The Hype Fund (THF) treats sneakers as tradable commodities to increase diversity in your investment portfolio and hit desirable returns. To do so, THF pools together money from investors like you - as little as $100. Then, THF uses data to make projections about which newly-minted sneakers will resell the highest. Finally, THF buys and resells sneakers for profit, distributing funds back in accordance with their user fee agreement. Their first fund batch boasts a 10% absolute return, according to their most recent report.
👇 The Drop Down
Trend: Alternative investments
Traction: 7% return on their first fund; Over five-figures of Assets Under Management
Team -UC Berkeley Undergraduates (data scientist, quant trader, and more!)
Max Shiau - Co-Founder
Michael Wang - Co-Founder
Tyler Wu - Co-Founder
Nathan Ju - Co-Founder
🔍 Why we like it
🙋♀️ Talk about portfolio diversification Diversification is important for any portfolio seeking gains for the long haul. When reflecting on the effects of COVID-19 on investments, THF saw their fund return 7% while the Dow Jones fell 10% in the same period. THF may provide a place for your money that doesn't correlate with stock performance.
📈 Sneaker resale is climbing Sneaker re-sale has been growing larger and larger. The market is projected to grow to $30bn by 2030. Interestingly, the seller-side of this market is highly fragmented with many individuals constrained for resources. By contrast, THF's consolidation of expertise, capital, and data helps make it a strong contender for resale profitability.
🔢 Data, data, data The re-sale market can be filled with speculation (they are, after all, The Hype Fund). However, THF puts data at the forefront of their shoe selection. THF uses historical performance, media attention, and projected value to build data-driven models to determine which shoes will come out on top. Apparently, there's a lot to analyze in how successful a single shoe model will be - see their analysis on the Nike Jordan 1 Court Purple here.
🎤 Founders Corner
🤝 Get involved with The Hype Fund
Check out their website
See their first fund's performance for yourself
Subscribe to their newsletter, The Hype Weekly, to find out what is on the investment team's personal sneaker watchlist
Find the newest sneaker releases on their Instagram
**NOTE: Nothing in The Daily Dropout or its affiliates constitutes professional and/or financial advice. Please invest responsibly and at your own risk.
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