For investors thinking that a firm like I Got It would be demanding a high valuation, think again. The company is asking for a low pre-money valuation of just $1.52 million. That amount is extremely low for the startup investing ecosystem. As a result, I Got It received an extremely high price score.

The market opportunity for sports as a whole is surprisingly large. The global sports market was worth an estimated $488.5 billion back in 2018 according to one of our sources. With a 5.9% annualized growth rate forecasted for it, it’s expected for the market to expand to $614.1 billion by 2022. Another market investors should look at, though, is the global collectibles market. There is certainly some crossover between collectibles and sports, since that’s where memorabilia fits in. However, the global collectibles market includes many categories outside of sports. That is why it may not be surprising to find out that this market opportunity is worth around $370 billion today. 

Drilling down, we eventually found our sweet spot: the sports memorabilia market. In the US, this market is worth around $5.4 billion. Globally, the figure looks to be much larger. The licensed sports memorabilia market is estimated to be worth about $12 billion. The autographed market, meanwhile, is worth around $2 billion. It’s these two niches that we feel best encompass the market that I Got It is trying to capture. Due to the small size of these niches, the market score for I Got It is middle of the road.

At this point in time, there are two key members working on the I Got It team that warrant discussion. The first is its co-founder, Nicole Johnson. In addition to running I Got It, Johnson serves as a Marketing Manager for Renaissance Global Services. That business operates as a project management consulting firm servicing companies across industries. Her experience in marketing should prove valuable in growing a firm that operates in a fandom-oriented space. Add in the managerial experience she has obtained there, and she sounds like a solid pick to lead the business. In the past, she held other interesting jobs. Her last role was as the owner and CEO of Gerda’s Cupcake Agency. And prior to that, she was an Account Executive at Hofstetter & Partners / Agency 212. Her role immediately before that was as an Agency Account Manager at Kinzel Advertising Agency. 

The other key person at I Got It is Joseph De Perio. His current role at the company is as Chairman of its Board. At present, he is employed as a co-founder at SportBLX. In the past, he was a Senior Portfolio Manager at Clinton Group, and before that he served as the VP of Millennium Partners. His experience at SportBLX relates to the sporting industry, but only loosely since its operations are still early-stage. His greatest benefit to I Got It will be from his oversight of financial firms and how that could translate to advising the company on value-accretive financing and other transactions. 

Overall, the team at I Got It looks quite solid. Due to the experience of these top individuals, the company received an above average team score.

What makes I Got It a really unique company is how it mixes its technology with its business model. Most firms that focus on sports memorabilia do so by buying and selling it themselves. Another way to get into the market is to act like eBay, which basically means to focus on serving as a portal for other sellers. I Got It, instead, works to secure contracts directly with the sports teams. This cuts to the chase and gives the business a known quantity of auctions it will hold annually. Additionally, I Got It’s business model leaves no doubt that the merchandise is legitimate. The downside to this arrangement is the large cash payment that I Got It has to pay for these deals. But so long as it can recuperate this and then some from its auctions, the business model should work. It is also worth noting that I Got It has successfully patented its technology, providing defensibility to business. Due to the unique nature of the firm and its patent, I Got It scored strongly on its differentiators rating. 

Though I Got It is a unique business, its performance to-date is discouraging. Yes, management ran a test of its platform and that test looks to have been successful. However, through October 1st 2020, the business has yet to generate anything in the way of revenue. It also had virtually nothing in the way of assets or other signs of operations. Cash on hand is around $80,000. But considering that just two of its deals will require it to pay out $300,000, it needs to close this round of financing in order to move forward. Due to the absence of significant traction, I Got It’s performance score is its lowest across all five metrics.

There are a few things that are bearish about I Got It that investors should consider. For starters, its limited traction — which is best illustrated by its absence of revenue — is an issue. Product/market fit has not yet been proven and adds significant risks. The company’s market is also quite small, so even if it does grow nicely, the upside is likely limited. Only by expanding into other collectibles and/or sports memorabilia might this picture change some. Add in the risk associated with paying out sizable sums of cash in exchange for the right to auction off memorabilia, and it’s unclear how well this business model will work out.

Bearish concerns notwithstanding, there are some bullish factors that investors would be wise to know. The super low pre-money valuation requested by management is the most obvious. If the company does find success, investors in this round will certainly reap the rewards. Add in the fact that I Got It’s contracts with partners will give it guaranteed activity, and it’s hard not to like the risk/reward opportunity we’re seeing. Management looks to be solid and the company’s test from July through August showed some promise. All of this together definitely makes this a firm worth considering.

Taking all of the data we have right now, I Got It is an interesting prospect for sports-oriented investors. The company’s unique business model is a double-edged sword that may or may not play out. But with the low valuation and attractive management team, it’s hard to say this is a bad prospect. These positives are outweighed some by a small, niche market and the absence of significant traction at this time. Thus, I Got It is a Neutral Deal at this time. 

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Daniel Jones.