Even before sports fans were deprived of watching live (insert your favorite sport here) earlier this spring, what’s collectively known as “combat sports” had a huge global following. Any doubts about that were put to rest when the Ultimate Fighting Championship (UFC) became the first major sports event to be staged after pandemic shutdowns. With so many fans, it makes sense that there’s an app for that and it’s currently crowdfunding. Let’s have a look at how to invest in AllTheBelts stock.
That app, ATB, is an aggregation platform with news, videos, podcasts and fan chat covering combat sports – boxing, wrestling and mixed martial arts, or MMA. It’s seeking to raise $250,000 by the end of August (with a $10,000 minimum) on the Netcapital platform. There is a $99 minimum investment on a $2.25 million valuation.
A word or two on Netcapital, which touts the platform as a way to help turn friends, family and customers into investors. The site has assembled a fairly impressive operating team, several with more than a few gray hairs (= deep experience). But even more impressive is an advisory board that includes DraftKings (NASDAQ:DKNG) co-founder and CEO Jason Robins, and former chairman and CEO of Verizon (NYSE:VZ), Ivan Seidenberg (= really deep experience).
App Gets Great Ratings
AllTheBelts is the bootstrapped brainchild of Timothy Childs. He describes it as part of his mission to “develop mobile apps for combat sports with the latest news and the most engaged communities.” So far, though, it’s just him driving the business.
Founded in 2019, the San Francisco area-based startup has about 23,000 installs, 3,000 monthly average users (MAUs) and 2,000 registered users.
ATB is highly rated, according to App Annie, the app analytics and app market data portal. It’s currently sporting a 4.86 out of 5.0 rating. There’s similar sentiment on the Appgroves ranking site.
Potential investors can also get a sense from those reviews of the competition that AllTheBelts faces, with a couple of dozen sport-specific apps – boxing, MMA, for example. But no others seem to have broad combat-sports coverage.
For example, according to the company’s SEC filing, the app offers boxing fans access to more than 60 content outlets. That broad coverage could be viewed as a negative, if die-hard fans follow one sport and may want an app that focuses only on that sport. Or, as a positive – advertising dollars come from both marketers interested in the particular sport or those interested in reaching across the teen male demographic using AllTheBelts.
“By aggregating content, combat sports advertisers will have access to a platform to run more targeted ads without have to negotiate with dozens of outlets,” the filing notes. I lean toward viewing the broad coverage as positive, as marketers as diverse as esports leader Take Two Interactive Software (NASDAQ:TTWO) or Nike (NYSE:NKE) would seek advertising placements on ATB.
Raise Will Pay for Advertising Push
To be sure, investors are putting their money into a classic freemium business model. There’s nothing necessarily worrisome about that, just understand that AllTheBelts will be monetized via advertising. My analysis confirms Childs is approaching this the right way, with rotating banner ads and the annoying, but effective full-screen interstitial ads. And like any successful freemium model, users will be able to pay for an upgrade that will, among other benefits, disable some ads.
Most of that $250,000 now being raised will be used to grow active users to a level where the app is generating advertising revenue, according to the filing. Mid-raise, AllTheBelts added content area for seven major martial arts last week, expanding on its initial boxing channel.
Bottom Line on AllTheBelts Stock
Venture capital firms typically cut to the chase with a key question for any entrepreneur: What problem are you solving ?
AllTheBelts is going after a target-rich environment. There’s a huge amount of content produced by combat sports publishers – websites, YouTube channels, podcasts, etc. Fans want a one-stop portal to consume that. On the other side of the transaction, advertisers want to efficiently and effectively manage their spend.
If you buy in to this analysis, it’s not too far of a stretch to buy in to investing in AllTheBelts. Netcapital gives investors some peace of mind, with your money held in escrow and returned if the ATB offering doesn’t reach its end-of-August goal. You can also change your mind up until 48 hours before the deadline.
Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups. He was previously emerging markets editor for Bloomberg News in Tel Aviv. He is a contributor to the Powered by Battery blog. Robert does not own any of the aforementioned securities.
Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:
1) Greater chance of failure
2) Risk of fraudulent activity
3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education
Read more: Private Investing Risks