What a difference a year makes…Our first year of operations is in the books! As you all remember, 2022 was a building and testing year for LUXUS, preparing the company for the LIVE Launch in 2023.
As we wrap up our Pre-Seed and prepare for a robust Seed Round in 2023, we want to take a moment to share with you both our accomplishments and challenges over the last twelve months.
Our top priority in 2022 was building our investment platform (tech + regulatory approvals), ensuring that we offer our community a best-in-class user experience as well as a compliant capital markets back end. This was completed on time and slightly under budget. As we were building the technology, we realized that we could simultaneously develop a state-of-the-art database that could provide valuable insights to the investment patterns of our users (which are highly correlated to luxury spending habits). We then embarked on both this initiative as well as the investment enhancement features we contemplated earlier in the year (secondary market for the IPOs and mobile apps) and expect to complete both with our Seed financing. Additionally, we prioritized opening the LUXUS investment platform to eligible Non-US investors and Entities. The geopolitical landscape and high inflationary environment created demand for “hard assets” from family offices, institutions and the global investment community, so we wanted to allow them to invest in the IPOs sooner rather than later.
Our second important milestone was to set up our registered issuer entity, LUXUS Argyle LLC, and register it with the SEC and FINRA. As this was the first time precious gems were formally securitized in the US, we expected a lengthy process and prepared for it for 6 months. Not only did the SEC award us a “no review” on the offering circular, we were also able to register two IPOs in 2022; the Rare Argyle Pink Diamond that was successfully completed (thanks to all of you), and the Golden Dahlia ring, which was sold privately before going live. This is more than we could have hoped for in our testing year, and we look forward to offering our investors an exciting pipeline of luxury assets in 2023.
Finally, our third goal was to acquire 10,000 users by the end of the year and through various means (and practically zero dollars spent on advertising), we have a database of about 37,000 users (full disclosure: they are at the low end of the funnel).
In 2023, our focus will shift from building and testing to market validation and product/market fit. To facilitate user growth we added new marketing features to the LUXUS platform including:
1) LUXUS VIP: for investors who invest and maintain such investment above a certain level, and who want to belong to an exclusive community, receive a management fee discount, advance notice of IPOs, concierge services, in person/virtual event invitations, special offers and more;
2) Sell With LUXUS: through which anyone can submit an exceptional luxury asset that they wish to sell through our platform. This feature allows us to engage with our community on a deeper and more personal level as well as evaluate potential new IPO candidates; and
3) All That Glitters: a weekly newsletter designed to keep our community informed of relevant market news, industry insights, must see museum shows, and all things from the luxury world.
It is also important to address the challenges faced by LUXUS and the startup community more generally. We still see user acquisition and the completion of the IPOs as the number one challenge for us and our peers, especially in these downward trending markets. We believe that alternative investments have become a critical part of both the institutional and retail investment communities who have long invested in real estate, gold, private equity and hedge funds. However, it will take time, education, trust, and a significant marketing budget to effectively execute on our strategy.
Other challenges include hiring professionals who have both experienced downward market cycles before (most millennials and Gen Zers have not) and are willing to trade cash compensation for equity in this high inflation environment. Executing on our ambitious marketing plan with the budget constraints of early stage financing is also somewhat of a challenge, but we have gotten resourceful, nimble and opportunistic with respect to this hurdle, utilizing our (my!) contacts in the business, social and financial worlds. Finally, working with asset suppliers who are not used to independent valuation, historical track records and quantitative analysis of their assets proved to be somewhat challenging, but we believe that this is part of the course of chartering a new asset class.
On a more positive note, the timing for LUXUS could not be better. We are going into 2023 with a solid cash position, the bulk of the technology built, and tremendous momentum. The rise of hard alternative assets has never been more powerful, and we believe that we are catching the uptrend of the next macro cycle in its infancy. We are inundated with speaking engagements, inquiries, thought leadership opportunities, competition wins and more. We were finalists in the HBS Angels of NYC Venture Competition and Semi-Finalists in the NASDAQ Fintech Competition of 2022.
Thank you SO much for taking a chance on LUXUS and on ME (!!) I’ve always acted as a fiduciary since my early days at Schulte and Blackstone and continue to take this responsibility very seriously. I am humbled and honored to share my vision with all of you, and on behalf of all women on Wall Street, I am full of gratitude.
Here is a link to our Seed Deck. We will be in touch once the Data Room and additional details are ironed out.
Wishing you the best holiday season and a joyful New Year.
Dana and the LUXUS Team