Pure - StockX For Rare Coins & Precious Metals

Company & Team Introduction

Pure is the first online marketplace for anyone to buy, sell, and analyze their precious metals and rare coins. For years, these industries have dealt with problems such as extreme market fragmentation, lack of transparency, and lagging behind technological innovation, which Pure is attempting to solve by bringing unmatched data and transparency to the industry. The company was founded in 2022 by UC Berkeley graduate Trey Benedict and David Gordillo, a pair of lifelong collectors of everything from cars and comics to coins. Benedict, the company’s CEO, has over a decade of numismatic experience working for the Smithsonian and Heritage Auctions, the world’s largest collectables auctioneer, having collectively bought, graded, and sold north of $20M worth of U.S-certified rare coins. During his tenure at these jobs, Benedict was acquainted with the many inefficiencies plaguing the industry and wanted to shift the industry towards a fairer marketplace-based experience rather than the massive historical premiums that coin/precious metal retailers have tacked on uneducated customers, so he teamed up with CTO David Gordillo to build Pure. The company is headquartered in Berkeley, California, and has grown its team to 3 people.

Product Overview

Pure offers a leading platform for numismatics to buy, analyze, and sell rare coins and precious metals. Historically, the numismatics industry has its fair share of flaws, including asymmetric distribution of information on pricing, population, and provenance and fragmented databases with outdated descriptions and data entry errors that are difficult to navigate, leading to unfair exchanges of value and a subpar user experience; especially for new users. The company wants to build a platform that is inclusive to everyone interested, including individuals, dealers, investors, and auction houses, and strives to create the fairest platform to transact on. To achieve this, the company offers the most comprehensive collectable coin index, containing all US-certified coins and information such as 7M+ historical pricing records across 72,000 different coin varieties. The database is extremely easy to use; scan, tap or enter the certificate number associated with the coin to gain access to pricing and population data, but Pure even takes it a step further by analyzing desirable coin traits such as toning, mint luster and eye appeal via the use of computer vision and gives a fair value estimate to the user, allowing for everyone to have a great experience on the platform. Users can also create lists and track different asset prices in real-time. All items sold through Pure are put through their verification tests and have highly secure transportation before reaching the purchaser.

Total Addressable Market

Between the precious metals and rare coins offered on the marketplace, it is easy to see the potential in modernizing this large but antiquated industry. The total addressable market for precious metals is a whopping $55B annually, and rising inflation over the past couple of years has led to further market expansion. Couple that with the collectable coin vertical, which was estimated to be worth north of $14B in 2022 and is slated to grow at an impressive 10.4% CAGR until 2032. If growth expectations are accurate, the total addressable market for collectable coins could balloon to $31.5B, an enormous opportunity for the Pure team.

Business Model & The Numbers

Pure is early in its business journey and is currently more focused on gathering a critical mass of buyers and sellers on its marketplace rather than monetizing them immediately. So far, traction has been strong, with over 326M of aggregate value currently listed on the platform across 1215 items. With such a high ticket transaction business, having a secure method of transportation and verification process is crucial. Pure has secured a key partnership with the largest wholesaler of precious metals in the US and secured a depository vault at the Las Vegas airport to ensure the highest security when items are transported and verified. All items are double-insured and are guarded by 24/7 security to ensure the safety of customer assets. The company doesn’t take a fee at the moment; if Pure were to theoretically add a ~5% fee on top of the fair value of the transaction, it would be a fantastic deal compared to industry incumbents and their predatory practices, which will be expanded on further in the competitors section.

Traction

Pure has already fostered a strong community of thousands of numismatics actively scanning and listing on its marketplace in addition to using its historical database to analyze different collectable coins. The company’s app is currently only available on iOS and has received promising early feedback, averaging 4.8 stars on the app store from 25 reviewers.

Competitors

The numismatics industry has been around for centuries but is far from flawless. It has been extremely slow to adopt new technology like software and computer vision to improve the transaction experience, which can be of massive value when assessing fair value pricing and historical coin information. Furthermore, many precious metal retailers utilize predatory practices, routinely tacking on expensive markups of 10% to up to an outrageous ~30% premium on what they sell, and when purchasing, only offer a fraction of the item’s actual value to unsuspecting customers. In addition, with the extremely limited options to sell gold online, customers don’t have another choice. Pure’s marketplace-based approach to buying and selling is highly differentiated from industry incumbents, providing more value to customers through ease of use, security and depth of historical data, giving customers the most accurate value of their coins/metals they will continue to use Pure.

Funding

Pure’s initial funding came from YCombinator, as YC invested the standard $500k check after completing their accelerator program in the summer of 2023. Later in the year, Pure raised an undisclosed amount in its seed round from a small but impressive list of participants, including firms such as the Pioneer Fund and Ludlow Ventures, along with distinguished angel investor Nathaniel Turner (Founder, Flatiron acq. by Roche for ~$1.9B).