Rally Rd. recently joined the long list of SEC-recognized investment companies, and while it’s just one of many trying to make a go of it in a massively populated field of services focused on making two dollars out of one, it’s offering a very unique asset class. Rather than shares of stock or slices of an ETF or piggybacking on someone else’s mutual fund, Rally Rd. lets you invest in pieces of supercars and other coveted means of four-wheel transport.
You aren’t buying the A-pillar mirror of a Ferrari 512 or a few yards’ worth of the ’70s by way of Lotus Esprit upholstery, but rather you are investing in a percentage of the car as a whole. It’s basically the same way buying stock works, so if you think you’re better at picking the next rediscovered classics to appreciate as opposed to betting on the price of oil or the next Fed jobs report, this should interest you. At the very least, it’s a way to play around with alternative investments involving exotic cars while staying above board legally.
Let’s say you don’t have the capital to purchase something like a Ferrari 512 BBi, but you do have some savings looking for a more meaningful purpose than warming your low-interest bank account and you happen to be a car enthusiast who believes values are rising on cars like the 512; there wasn’t a way to act from this position. Rally Rd. changes the possibilities by providing the chance to buy shares. Sure, you don’t get to park it your garage at night and you can’t take it out on your favorite roads, but that was never on the table to begin with. This lets you participate in the marketplace without having a ton of capital, and even if you can afford to purchase outright, the ability to spread out your investments among multiple vehicles can galvanize the automotive side of your portfolio while removing the burdens and risks of things like storage and maintenance.
From the creators, here’s how it works:
We acquire best-in-class assets, then allow members to participate in vehicle “IPOs.” Once fully funded, registered broker-dealers maintain a once-monthly marketplace within the app that allows users to trade in-and-out of those securities.
Through our network of private collectors, automotive historians, premier dealers & auction houses, we identify & securitize limited production vehicles with historical & cultural significance and documented provenance. The cars are treated as works of art and meticulously maintained in our secure east coast facility. On the Rally Rd. app, members get to see every piece of documentation associated with an asset—view each angle, chat with others about the market, and make informed investment decisions with the help of interactive price charts, comparable transaction values, and expert opinions.
The company’s stated mission is to “Democratize alternative asset investing by providing access, liquidity, and transparency to markets that have traditionally only been available to a select few,” and that’s a pretty accurate summary of a service that allows a kid making McDonald’s money to reap the rewards of Italian sports car appreciation. It’s too early to say what the user makeup will look like for this service, but considering that to invest in artwork or cars or any other high-value tangible items one typically must have a lot of wealth to spare or borrow against, it’s conceivable that Rally Rd. could lower these barriers and offer a few more seats at the table. Currently the app has about 1,000 investors using it currently, who have completed three “IPOs” and raised more than $500k in the process. The average user age is 26, and the average investment is $480.
What do you think? Are you interested in buying shares of 356 Speedsters instead of more of your mutual fund?
