Geeks and jocks may not always share the same lunch table, but Loot Crate CEO Chris Davis knows one thing they do share--a love of collectibles. Five months after being named No. 1 on our Inc. 5000 list of America's fastest-growing companies, "The Geek Subscription Box for Gamers and Nerds" has just signed a deal to become the exclusive subscription crate of Major League Baseball.
"Sports are a new type of fandom for us," Davis says. "This is going to be a huge growth moment for the company."
The past year has been a series of huge growth moments for the $112 million startup. Last spring, Loot Crate took home $19 million in its Series A, one of the largest deals in a year that saw investment dollars dwindle for subscription boxes across the board. With a walloping three-year growth rate of 66,789 percent, the company earned the valedictorian spot for our Inc. 5000 class of 2016. It whiffed with e-sports sponsorships that didn't deliver, but then conjured a big win in October by launching bi-monthly Wizarding World Crates for fans of J.K. Rowling's magical universe.
With 25,000 new subscriptions since September, Loot Crate has doubled down on customer experience--opening a new headquarters in London to support more local and immersive experiences and partnerships across the United Kingdom and Europe. Differentiation in the subscription box market depends on realizing that a monthly box of fun stuff must be more than a monthly box of fun stuff. "Every part of the experience needs to be special, from community to support to the product and experiences in the box," Davis says. Loot Crate's packaging, for example, "transforms and supports the theme of the month in a way that reinforces the experience--like last July, when we turned the Ghostbusters specialty crate into a proton pack. We look to add value on every bit of it."
In the age of social media, such attention to detail pays dividends in views, Likes, shares, and comments. Loot Crate has been a big player in the unboxing phenomenon: the proliferation of homegrown videos of consumers finding drama and delight in removing products from their packaging. "Brands don't own social media," says Davis. "People do."
But brands need to own their own message somehow. Lately, the company has made a push into original content, including a Loot Crate-sponsored Joker-off (versions Ledger versus Leto) and also "Wake and Bake with Kevin Smith and Andy McElfresh," a bunny slope of a cooking show starring the geek world's éminence grise alongside the writer and director of Clerks.
Of course, the company's success is tied to that of its industry, which, according to CB Insights, has been riding the kind of roller coaster people buy T-shirts to commemorate. For Loot Crate, there's the added challenge of being a maturing brand seeking loyalty from a consumer base that craves variety and surprise. And it's a crowded field, with nearly 60 established names having raised a collective $1.4 billion for the chance to mail you monthly dog treats, lip gloss, razor blades, work shirts, diapers, coffee, lingerie, and so on.
Loot Crate, for its part, has 10 iterations of boxes to satisfy the needs of today's discriminating geek or gamer. Davis is optimistic that his startup can translate its mastery of satisfying these fandoms to sports nuts. To this effect, he has launched a new division to "speak directly to the needs of sports fans."
"This is the key to being successful," Davis says. "You need to speak the same language and be authentic within the spaces where you hope to play."