Kiwi tech company reinventing the collectibles industry

David Yu has been in the gaming and collectibles industry since the age of 17. Starting out in the world of trading cards, comics and toys, David opened a retail shop in Auckland that would bring together fans and collectors alike – a business he still owns to this day. It was through his shop that David crossed paths with Dan Crothers. The two shared a mutual interest in games and quickly became friends. In 2017, as blockchain technology was emerging as the new digital frontier, the two connected again with the revelation that the next innovation in collecting was to be in the digital realm. Bringing together David’s experience in retail and gaming, and Dan’s background in web design, development and technology, the pair leveraged their combined skillset to create an app that would bring their vision for a digital world to life – VeVe.

VeVe has transformed and revolutionised the collectibles industry by providing a platform that utilises blockchain and augmented reality technology to enable its users to buy, sell and interact with licensed digital collectibles of their favourite characters and brands. The blockchain technology underpinning the platform authenticates the content and gives it provenance through a digital transaction history.

In just a few short years, VeVe has cemented its place in the NFT and collectible field, achieving rapid growth and placing the company firmly at the top of the 2023 Deloitte Fast 50 index as one of the country’s most successful and innovative technology businesses.

Launched in 2020, VeVe is partnering with some of the world’s biggest brands and entertainment studios, including Disney, DC, Marvel, Sesame Street, Coca Cola and Lamborghini, to name just a few. It’s difficult to pinpoint one defining factor in the success and growth of VeVe. In some ways, many different elements came together at just the right time, but in others, it’s evident that David and Dan have boldly and successfully executed a very deliberate strategy.

Observing the shift towards online spaces, the pair began to ideate the VeVe concept. As David explains, “the toy industry is in decline. In the past, kids would buy and play with toys up to the age of 12 or 13. Now, they have tablets and electronic devices much earlier.” This extensive knowledge of consumer trends is no doubt owed to David’s background in retail but crucially, it would also be a key selling point when pitching the central premise of VeVe to major Hollywood entertainment studios.

David and Dan were on the ground in the US presenting their vision before they had a following, customers, revenue or even a prototype. “We were pitching our idea to these big IP owners, who don’t usually take meetings, and this was pre-launch. All we had were some PowerPoint slides. It was a dream more than anything,” says David speaking of the perseverance, drive and consistency that would be required when knocking on the doors of such global heavyweights. The pair would then go back to the studios with roadmaps and updates, each time fielding an increasing number of questions around sales, marketing, design, security, authentication, technology – the list goes on.

Undoubtedly, these questions required answers but, as David explains, there would be several keys to securing the impressive licensing arrangements and brand partnerships that the business has now: presenting the data to validate shifts in consumer behaviour towards digital, illustrating the utility of a digital collectible and selling decision-makers on the idea that fandoms and characters from different universes could co-exist in one app. This would be no easy feat. Licensors would examine and dissect every facet of the business. As some of the most well-established and valuable brands in the world, it’s unsurprising that the focus would be on security, IP protection and brand governance. But David and Dan had been quietly making an impression. Licensors needed to be convinced and sold on the idea that there would be a market and demand for digital products. “We had been building trust and we, ourselves, are collectors, so it was about getting them to buy into the idea that there would be a future demand for digital collectibles, which we were able to do as the consumers of our own offering” explains David.

They were proven right. Projections had VeVe user numbers at 60,000 by the end of its first year – but the app exceeded all early expectations, reaching that number an impressive six weeks after launch. “When we launched, we quickly had millions of app downloads and hundreds of thousands of accounts that owned a collectible.” Digital items on the platform were selling out at record speed, in some cases within microseconds. With surging demand and deliberately limited supply, a scarcity emerged that would only intensify the passion of collectors who feared missing out on the opportunity to buy limited digital content from their favourite brands.

But it wasn’t all smooth sailing. Like many rapid growth stories, there would be some challenges along the way. The technology behind the app had been built with the projected user numbers in mind. With higher than anticipated levels of traffic and increasing transaction volumes, the VeVe team had to adjust, repair and rebuild as required. The demand for collectibles would only continue to grow once the utility of a collectible was proven. Through VeVe, a user can display owned collectibles in an online, customised gallery, or bring a character into their living space through augmented reality. The collector can interact with characters and showcase their collection by sharing videos and images on social media and making use of the functionalities within the app. “Social media is a big part of our business because we are centred around fast content. We have a new collection drop nearly every day,” says David reinforcing the need to maximise the social platforms that enable rapid sharing and community-building to reach new and existing audiences.

The idea of community is where it all started for David. In his shop, people come together in person to play games. Friendships are built through shared interests. And now, VeVe is the innovation of that simple concept. “How we built VeVe is how we imagined the retail side of fandom would work in the digital space. We saw a niche area where fans who love certain characters or brands didn’t have an app that brings them together.” Now, people can connect and start a dialogue through the common language of shared interests and admiration for characters and brands.

What’s unique about VeVe is that it exists in a niche, while simultaneously capturing a wide fan base along the way. The app makes available hundreds of characters from different franchises, meaning that there’s something available for everyone. “We discovered that the brands we partner with resonate across a wide range of demographics, which means that we’re able to reinvent the way people can have ownership of the things they love,” says David referencing a specific instance of launching a first edition Spiderman comic book from the 1930s, today, allowing comic collectors to have the experience of owning a rare first edition for the first time.

For a business that’s centred around technological innovation, it’s no surprise that its founders are now exploring the next frontier. Recently, VeVe ventured into the “phygital” space to capture the interest of collectors who are more inclined to purchase physical items. Partnering with Funko to offer a limited edition 18-inch Iron Man collectible that would give the buyer a free digital version that mirrors the physical, VeVe is expanding its presence and capturing the imaginations of a broader audience.

An expansion of this mixed physical and digital market is next on David’s radar, along with ventures into the world of music and sport, a focus on regulation and security as well as the exploration of new technology and how VeVe might be able to leverage it to offer the market something new. And, of course, the VeVeVerse – an upcoming metaverse project, where users will be able to create, exist and interact in a 3D online world with their digital collectibles and other collectors.

The remarkable journey of David, Dan, and VeVe is the exemplification of a relentless pursuit of progress. Their unwavering commitment to pushing the boundaries and exploring new and untapped realms has driven their vision for a digital world forward. With each ground-breaking innovation, they’re continuing to redefine what is possible, leading the way with visionary ambition right to the top of the Fast 50, and beyond.

VeVe Digital – ranked 1st on the 2023 Deloitte Fast 50 index.

Take a look at our Fast 50 e-zine, Insights from Innovators, for more fast growth stories from the Deloitte Fast 50 programme, here.