HYP
Setting the Scene
In 2018, Crocs collaborated with Balenciaga to release a limited edition boot with a price tag certain to leave a dent in your bank account. 👢
The release helped Crocs generate future demand and build a reputation beyond footwear for the water park. 🐊
Exclusive releases have become a critical brand marketing strategy, and companies spend millions to resonate with luxury buyers and drive brand value. 📈
However, unlike Crocs, most exclusive releases fall short, forcing brands to offer discounted products and damage their reputations.
This week’s company provides a platform that enables brands to offer product drops without marketing spend and shoppers to bid socially.
In a Sentence
HYP is an auction platform that enables brands to sell exclusive releases and shoppers to publicly bid for items.
Brands: Market and sell exclusive product drops to elevate the brand.
Shoppers: Link an Instagram account to bid and buy with social exposure.
Bulleted Version:
- Similar to how an auction house lets individuals bid on products to drive value, HYP’s social auction platform lets users bid on products to drive value and virality. 👩⚖️
The Basics
- Headquarters: New York, NY
- Employee Count: 7
- Investors:Ekundu Capital, Soma Capital, Human Capital, Rough Draft, Palm Tree Crew (Kygo), Kirby Winfield, Mohit Gulrajani, Jeffrey Nicholson, Geoffrey Woo, Brad van Voorhees, Maggie Hsu, Jake Paul
- Funding amount: $1.3m pre-seed
- Business model: 25% commission on auction sales
- Early traction: 7 auctions with $900k+ in bids, $92k in auction sales, 13m organic impressions with $0 marketing spend
Due Diligence
WHAT WE LIKE
💥 Auction market: The global auction market is projected to grow 12% each year to reach $11.5b by 2027, driven by innovation in social commerce and a rise in young collectors who desire exclusive items.
HYP’s social-first approach helps drive demand, discovery, and celebrity engagement.
🤑 Rethinking brand marketing: Brands use product drops to build scarcity marketing and anticipation but spend millions on influencer marketing to advertise the launch.
HYP allows brands to launch exclusive releases and receive millions of impressions with no upfront costs.
🛍 Expansion opportunities: As HYP continues to build traction, the company has the potential to increase consumer purchases and diversify revenue by expanding product offerings, allowing brands to sell directly on the platform, and entering the resale market.
POTENTIAL RISKS
🔁 Limited selection: HYP only sells a limited selection of products during scheduled auctions, which may slow initial revenue and limit the company’s ability to generate a network effect.
🕶 Socially reliant: The platform relies on bidders sharing on social media and coverage from news sources to replace media and influencer marketing.
🤝 Bidder trust: HYP must navigate auction regulations and establish trust with bidders in the hostile and competitive high-fashion product drop market.
Founder Profile
Hayoung Park, CEO: Previously studied entrepreneurship and business at Babson College.
Comps
Joopiter: Founded by Pharrell Williams and backed by Lightspeed.
Novelship: Backed by GSR Ventures, East Ventures, iGlobe Partners, and others.
Flip: Backed by Y Combinator, Lightspeed, and Base Ventures.
Klekt: Investors not disclosed.
Why HYP
As the only platform working with brands to release limited edition products, attention from top news sources, strategic celebrities on the cap table, and a Supreme t-shirt that sold for $52k, we are hyped about this company’s potential to disrupt the auction experience. 😤
