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.

The Basics

• Industry: Consumer internet, retail, brand marketing

• Headquarters: New York, NY 🗽

• Year founded: 2020

• 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

• Amount raised: $1.3m pre-seed

• Currently raising: $1m pre-seed extension

• 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

IN PARTNERSHIP WITH

• Gravity is an all-in-one data platform providing real-time insights on founders and startups to help you stay one step ahead of technology trends, funding insights, and company launches.

• Gravity’s proprietary FounderDNA™ feature tracks key founder characteristics such as prior exits, past experiences, and more in an easy-to-use dashboard.

• You can sign up here and access a 14 day free trial.

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.

📌 Bulletin Board

• 🦄 Where are the unicorns? Egypt-based MNT-Halan was the only fintech company that achieved unicorn status in Q1, reflecting the broader slowdown of large financings in the vertical.

• ✔️ The checkmark debate: Last week, Twitter removed legacy verified checkmarks from high-profile users not paying for Twitter Blue, but went back on the decision by re-checking select users.

🗳 Cast your vote

Last Week Today

• The results are in: Sundays, a company disrupting the Oreo with its sugar-free creme cookie, was voted a winner by 56% of voters.

• Subscriber feedback: “If this cookie tastes even remotely good, it'll get acquired by Mondelez…within the next few years.”

✍️ Written by Brett and Sam

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