Loot Crate has built a business supplying comic book and sci-fi fans with monthly shipments of goodies typically only found at specialty shops or conventions.
Soon, Loot Crate could apply the same formula to sports, music and more corners of entertainment -- getting fans to purchase merchandise without having to wander the Web or hike to stadiums and concerts. Loot Crate already has boxes aimed at new groups, including pet owners, anime fans and people who specifically want clothing.
The Los Angeles company is in a position to expand after receiving $18.5 million from venture capital firm Upfront Ventures, private equity group Breakwater Investment Management, magazine publisher Time Inc., Robert Downey Jr. and Susan Downey’s investment fund, and the venture fund tied to New York Mets owner Sterling Equities.
“There is a massive opportunity to grow internationally,” Loot Crate Chief Executive Chris Davis said. “Fans exist across the globe, beyond what’s currently in pop culture. To go after this, it requires money.”
Two years ago, Loot Crate co-founders Davis and Matthew Arevalo weren’t seeking investors. But their company grew to 600,000 customers from 200,000, and sales last year topped $100 million.
The numbers caught the eye of investors, and the Loot Crate team eventually agreed that accepting outsiders’ cash could help hasten some projects and make them more known across the business community, Upfront Ventures partner Greg Bettinelli said.
“Pop culture products -- tangible and digital -- and the communities that follow and engage in those global brands are very unique from a commerce perspective,” Bettinelli said. “There are so many passionate communities around sports, music, entertainment that can be leveraged with Loot Crate.”
In a single town, there might not be enough sci-fi and comics fans to sustain a shop. But across the world, they’ve got plenty of buying power.
The pop-culture-themed T-shirts, dolls, posters, flashlights, magnets and other nicknacks that come stuffed in the Loot Crate box are sometimes available at other online shops. But Loot Crate has separated itself by cultivating relationships with major entertainment companies.
That’s enabled Loot Crate to curate the most interesting products and land at least one big-ticket or highly sought item in every goodie box. Those one-of-a-kind offerings, such as a special “The Walking Dead” comic, often sell for many times the price of the box on EBay.
Entertainment and toy companies sometimes provide Loot Crate with merchandise at a bulk discount and view inclusion in the box as a crucial marketing tactic. Since customers worldwide receive the box around the same date, cool products can spur a blast of social media chatter about, for example, a new movie.
“It’s a virtuous circle of content, commerce and experience with incredible potential for fans and creators alike,” Bettinelli wrote on his blog last week.
Smartphone ticket usage soaring in L.A. sports
Sports and music tickets app Gametime was developed in San Francisco, but the start-up’s leading market has turned out to be Los Angeles.
Like StubHub, Gametime sells tickets offered by brokers, season pass holders or anyone else not planning on attending an event. But save for exceptions such as the Super Bowl, Gametime only hands out electronic tickets, which are scanned off smartphone screens at the turnstile.
Dodger Stadium saw more people show up at the gate with tickets on Gametime than any of the other 29 Major League Baseball venues during the first two months of the season, according to the company. The Dodgers declined to reveal ticketing statistics.
Major League Baseball couldn’t immediately say how many people show up at stadiums without a paper ticket, but single-game issuances of tickets via mail or will call have fallen to just 15% of online ticket sales leaguewide from 18% last year and 53% in 2011. Purchases on smartphones -- regardless of ticket medium -- have almost doubled from last season to 10% of all single-game online purchases.
Smartphone shopping is a major interest area for entrepreneurs, and Gametime’s rise since launching in 2013 suggests ticketing is one place quickly accepting new ideas.
Compared with the first two months last season, Dodgers ticket purchases on Gametime have doubled and overtaken purchases for San Francisco Giants home games. The two clubs stand ahead of the Angels, Seattle Mariners and Chicago Cubs.
Combining Dodgers and Angels data make Los Angeles Gametime’s top grossing MLB market, with 28% more transactions together than for the Giants and Oakland A’s combined. The average Gametime ticket has cost Dodger game attendees $27 this season, compared with $34 for the Giants.
Los Angeles’ dominance in mobile ticketing is poised to continue. The Rams have been the top-seller in the NFL on Gametime, with an average seat price of $185 that’s only beaten by the Green Bay Packers.
Pasadena Angels seeks bigger role
Members of the investor organization Pasadena Angels have pooled together $1.3 million to fund start-ups.
The 16-year-old group’s first joint fund is meant to give it more influence and increase its chances of striking gold, without taking on too much additional risk.
The 100 wealthy individuals who are part of Pasadena Angels together hear from new businesses that need capital. But when it comes to writing checks, everyone’s on their own. People without enough money can be cut out of a deal or be stuck with unfavorable financing terms.
But now, members writing personal checks can get the new joint fund to join an investment as well. By taking a larger position in a company, the group as a whole should have more sway. And members of the new fund should have more diverse portfolios because they’ll get indirect stakes in many more companies. The fund expects to provide infusions of $50,000 to $100,000.
Pasadena Angels members have invested $65 million in almost 200 companies since 2000, including in business software companies Mind Body and Bluebeam.
Elsewhere on the Web
- Players of Blizzard Entertainment video games such as “World of Warcraft” and “Hearthstone” can now log on using their Facebook credentials, according to Venturebeat.
- Indian online video production company Silly Monks, which has offices in Los Angeles, has received about $50,000 from investors, according to Livemint.
- Los Angeles home builders, seeking to recoup the costs of following what they view as onerous regulations, are creating expensive, luxurious developments with more “technological bells and whistles” to attract the tech crowd, according to KPCC.
In case you missed it
- Now joining the ranks of hairdressers, nannies, brand managers and personal chefs are computer security experts, entrusted by the rich and the famous to stave off threats to social media accounts, smartphones and home networks.
- Yahoo’s small expenditure on TV shows and movies compared with Amazon and Netflix illustrates a recurring stumbling block that has now put the company in a position where it might have to sell.
- Start-ups have long been the domain of venture capitalists. But with this week’s staggering $3.5-billion investment in Uber from Saudi Arabia’s Public Investment Fund, the tech world has been put on notice -- sovereign wealth funds are loaded with cash and ready to do business directly.
- Periscope hopes to stop abuse and spam on its video streams by turning its users into judges, juries and commentators.
- Lucid VR is one of a slew of players, both large and small, that are scrambling to establish themselves in the burgeoning market for VR-enabled cameras.
A company created by UC Irvine students is among 10 college start-ups that are competing for a $250,000 in cash as part of the Recess Field Trip program, according to Forbes. The UC Irvine group has founded BottleRocket, which aims to turn recycling into a daily habit. The competition finale is Thursday in Los Angeles.