Planning more growth, TCGplayer accepts $10M equity investment

SYRACUSE — TCGplayer’s workforce has doubled to 200 in the past four years and CEO Chedy Hampson expects it to reach 500 in the next five years.

He recently accepted a $10 million equity investment to help make that happen.

The 20-year-old company provides an online marketplace (TCGplayer.com) for collectible gaming cards and related products — things like Pokemon, Yu-Gi-Oh, and Magic: the Gathering. It also offers point-of-sale services to brick-and-mortar hobby shops that allows them to manage inventory and provides up-to-the-minute information on the value of cards.

Until this year, Hampson has not brought outside investors into the company that he and Ray Moore founded in 1998. Moore is VP of products for TCGplayer. With the exception of a $40,000 bank loan he took out in 2008, the company has grown by reinvesting profits, Hampson tells CNYBJ.

“Turns out marketplaces are good business models,” he quips.

The company’s growth curve headed skyward in 2014 when it added “another layer” to its marketplace, switching from being an eBay competitor that simply gave card buyers and sellers a place to find each other to a model more like Amazon. Instead of buyers getting different packages from each seller, the TCGplayer Direct service consolidates purchases into a single package.

Buyers find the cards they want from any participating seller and place their order. Instead of, say, getting packages from five sellers, TCGplayer Direct draws the ordered cards from its inventory and ships them to the buyer in a single package.

In turn, the seller sends TCGplayer the same card, in the same condition, to replace what was taken from inventory.

To do this, the company keeps an inventory of the biggest selling Magic: the Gathering cards. (As of now, that game is the only one TCGplayer Direct services.)

For sellers, TCGplayer means that instead of packing and shipping dozens of cards each day, they ship one or two packages a week to TCGplayer Direct.

“People seem to like that,” Hampson observes. That customer demand allowed TCGplayer to expand from a dozen workers in 2013 to 75 by 2015.

TCGplayer offices

That growth has required the company to change its physical space. Where once Hampson could run the business from his living-room couch while others worked remotely, by 2013 it was necessary to rent space to bring the team together.

That first space was on the 10th floor of the State Tower Building in downtown Syracuse. In 2016, the company moved to two floors at AXA Tower 2. Last year, TCGplayer moved its offices to South Clinton Street and its operations — where cards are received, warehoused, packaged, and shipped — to the Galleries of Syracuse.

TCGplayer is now looking to once again bring the entire company together in an enlarged space in the Galleries. It sought and received from the Syracuse Industrial Development Agency approval for sales-tax breaks on purchases needed to make that happen.

Investors

Such growth has attracted attention from potential investors. Hampson has been invited to present before investor groups. “We spent over a year going over the process,” he recalls, before finalizing the $10 million investment from Radian Capital, a New York City–based equity capital firm.

What attracted Hampson to Radian was the firm’s ability to link him up with formal and informal advisors, people with backgrounds at tech successes such as Jet.com and Etsy. “They have knowledge,” Hampson says, “they are experts in technology companies that had to ramp up.”

Part of TCGplayer’s due diligence was talking with other companies in which Radian had invested. Radian invited Hampson to ask those clients anything he wanted. 

When it came time to decide, Hampson says it was clear Radian shared his commitment to getting bigger. “They were only interested in helping us grow.”

Radian gets a share of the company from the investment, but Hampson remains the majority shareholder. The investment will also result in TCGplayer having a formal board.

Growth for TCGplayer can come from several sources. As a marketplace, the company serves more than 1,800 brick-and-mortar hobby stores in the trading- card market. That’s less than 20 percent of the 10,000-store market, according to company statistics.

Moreover, TCGplayer’s point-of-sale services have penetrated less than 10 percent of the market.

Beyond that, there are parallel markets where TCGplayer’s model could help sellers with other product lines they carry, such as collector comic books, action figures, and board games. Worldwide, that market tops $20 billion, the company says, giving some context to the $250 million in sales by brink-and-mortar stores that have gone through TCGplayer since it began.

Along with real estate, rapid growth has required TCGplayer to recruit talent. Hampson says that has been helped by the nature of the people who are interested in collector card games. People visiting the company’s website for trading cards will stop by the career page.

That outreach has been capitalized on by the company’s recruiting team that Hampson called “fantastic,” noting it is headed by a former Lockheed Martin official.

Maintaining and managing all this growth has been demanding on Hampson, 44. He reads management books – singling out classics such as “Good to Great” and “Built to Last,” as well as more recent books such as “Tribal Leadership” and “Delivering Happiness.”

He also turns to friends and meditation to help him deal with the “incredible stress” brought on by such growth.

His advice to aspiring entrepreneurs: Reach out to people and network. He says moving TCGplayer to downtown Syracuse allowed him to meet and hear from many people, greatly expanding his business knowledge.

“The moment we moved downtown, I really started to learn,” Hampson says.    

The largest high-tech investment ever in Syracuse?

SYRACUSE — Chedy Hampson believes the $10 million Radian Capital is investing in TCGplayer is the largest single venture-capital investment ever made in Syracuse.

He has research to back it up: information gleaned from local, upstate, and national venture-capital groups and business publications.

He found:

• The largest previous venture investment, $2.2 million, was secured in 2016 by Good Uncle, a startup that seeks to bring big-city food to smaller markets.

• The second largest prior investment was landed by Plowz and Mowz, the startup that links property owners to landscape services when they need them. That $1.5 million investment came in 2016.

“It is the single largest investment in high tech in Syracuse in the last 10 years. I can’t say ever,” Nasir Ali, co-founder and CEO of Upstate Venture Connect (UVC), says of Radian Capital’s investment in TCGplayer. UVC facilitates venture investment in the region. 

There have been larger investments in Central New York — industrial companies have spent many tens of millions expanding or updating plants and technology companies have drawn investments that over time have totaled many millions — but among venture-capital investments, Hampson is convinced his company’s $10 million venture investment is blazing a path.

And it’s a path he wants others to tread. One of Hampson’s goals is for TCGplayer to spur the creation and growth of other area tech companies. 

That would be good for the other businesses and the region’s economy, he says. He points out that it would also help TCGplayer. About 20 percent of the company’s workforce comes from out of state. 

When potential employees are considering moving to Syracuse to work at TCGplayer, they have a concern about where else they might work in the region, if the need arises. More high-tech companies could give them more confidence that Syracuse is a place they can build their careers, Hampson contends. For that reason, he hopes headlines about the largest venture-capital investment ever, draw more investor attention, and more successful high-tech startups, to Central New York.

— Charles McChesney

SYRACUSE — TCGplayer’s workforce has doubled to 200 in the past four years and CEO Chedy Hampson expects it to reach 500 in the next five years.

He recently accepted a $10 million equity investment to help make that happen.

The 20-year-old company provides an online marketplace (TCGplayer.com) for collectible gaming cards and related products — things like Pokemon, Yu-Gi-Oh, and Magic: the Gathering. It also offers point-of-sale services to brick-and-mortar hobby shops that allows them to manage inventory and provides up-to-the-minute information on the value of cards.

Until this year, Hampson has not brought outside investors into the company that he and Ray Moore founded in 1998. Moore is VP of products for TCGplayer. With the exception of a $40,000 bank loan he took out in 2008, the company has grown by reinvesting profits, Hampson tells CNYBJ.

“Turns out marketplaces are good business models,” he quips.

The company’s growth curve headed skyward in 2014 when it added “another layer” to its marketplace, switching from being an eBay competitor that simply gave card buyers and sellers a place to find each other to a model more like Amazon. Instead of buyers getting different packages from each seller, the TCGplayer Direct service consolidates purchases into a single package.

Buyers find the cards they want from any participating seller and place their order. Instead of, say, getting packages from five sellers, TCGplayer Direct draws the ordered cards from its inventory and ships them to the buyer in a single package.

In turn, the seller sends TCGplayer the same card, in the same condition, to replace what was taken from inventory.

To do this, the company keeps an inventory of the biggest selling Magic: the Gathering cards. (As of now, that game is the only one TCGplayer Direct services.)

For sellers, TCGplayer means that instead of packing and shipping dozens of cards each day, they ship one or two packages a week to TCGplayer Direct.

“People seem to like that,” Hampson observes. That customer demand allowed TCGplayer to expand from a dozen workers in 2013 to 75 by 2015.

TCGplayer offices

That growth has required the company to change its physical space. Where once Hampson could run the business from his living-room couch while others worked remotely, by 2013 it was necessary to rent space to bring the team together.

That first space was on the 10th floor of the State Tower Building in downtown Syracuse. In 2016, the company moved to two floors at AXA Tower 2. Last year, TCGplayer moved its offices to South Clinton Street and its operations — where cards are received, warehoused, packaged, and shipped — to the Galleries of Syracuse.

TCGplayer is now looking to once again bring the entire company together in an enlarged space in the Galleries. It sought and received from the Syracuse Industrial Development Agency approval for sales-tax breaks on purchases needed to make that happen.

Investors

Such growth has attracted attention from potential investors. Hampson has been invited to present before investor groups. “We spent over a year going over the process,” he recalls, before finalizing the $10 million investment from Radian Capital, a New York City–based equity capital firm.

What attracted Hampson to Radian was the firm’s ability to link him up with formal and informal advisors, people with backgrounds at tech successes such as Jet.com and Etsy. “They have knowledge,” Hampson says, “they are experts in technology companies that had to ramp up.”

Part of TCGplayer’s due diligence was talking with other companies in which Radian had invested. Radian invited Hampson to ask those clients anything he wanted. 

When it came time to decide, Hampson says it was clear Radian shared his commitment to getting bigger. “They were only interested in helping us grow.”

Radian gets a share of the company from the investment, but Hampson remains the majority shareholder. The investment will also result in TCGplayer having a formal board.

Growth for TCGplayer can come from several sources. As a marketplace, the company serves more than 1,800 brick-and-mortar hobby stores in the trading- card market. That’s less than 20 percent of the 10,000-store market, according to company statistics.

Moreover, TCGplayer’s point-of-sale services have penetrated less than 10 percent of the market.

Beyond that, there are parallel markets where TCGplayer’s model could help sellers with other product lines they carry, such as collector comic books, action figures, and board games. Worldwide, that market tops $20 billion, the company says, giving some context to the $250 million in sales by brink-and-mortar stores that have gone through TCGplayer since it began.

Along with real estate, rapid growth has required TCGplayer to recruit talent. Hampson says that has been helped by the nature of the people who are interested in collector card games. People visiting the company’s website for trading cards will stop by the career page.

That outreach has been capitalized on by the company’s recruiting team that Hampson called “fantastic,” noting it is headed by a former Lockheed Martin official.

Maintaining and managing all this growth has been demanding on Hampson, 44. He reads management books – singling out classics such as “Good to Great” and “Built to Last,” as well as more recent books such as “Tribal Leadership” and “Delivering Happiness.”

He also turns to friends and meditation to help him deal with the “incredible stress” brought on by such growth.

His advice to aspiring entrepreneurs: Reach out to people and network. He says moving TCGplayer to downtown Syracuse allowed him to meet and hear from many people, greatly expanding his business knowledge.

“The moment we moved downtown, I really started to learn,” Hampson says.    

The largest high-tech investment ever in Syracuse?

SYRACUSE — Chedy Hampson believes the $10 million Radian Capital is investing in TCGplayer is the largest single venture-capital investment ever made in Syracuse.

He has research to back it up: information gleaned from local, upstate, and national venture-capital groups and business publications.

He found:

• The largest previous venture investment, $2.2 million, was secured in 2016 by Good Uncle, a startup that seeks to bring big-city food to smaller markets.

• The second largest prior investment was landed by Plowz and Mowz, the startup that links property owners to landscape services when they need them. That $1.5 million investment came in 2016.

“It is the single largest investment in high tech in Syracuse in the last 10 years. I can’t say ever,” Nasir Ali, co-founder and CEO of Upstate Venture Connect (UVC), says of Radian Capital’s investment in TCGplayer. UVC facilitates venture investment in the region. 

There have been larger investments in Central New York — industrial companies have spent many tens of millions expanding or updating plants and technology companies have drawn investments that over time have totaled many millions — but among venture-capital investments, Hampson is convinced his company’s $10 million venture investment is blazing a path.

And it’s a path he wants others to tread. One of Hampson’s goals is for TCGplayer to spur the creation and growth of other area tech companies. 

That would be good for the other businesses and the region’s economy, he says. He points out that it would also help TCGplayer. About 20 percent of the company’s workforce comes from out of state. 

When potential employees are considering moving to Syracuse to work at TCGplayer, they have a concern about where else they might work in the region, if the need arises. More high-tech companies could give them more confidence that Syracuse is a place they can build their careers, Hampson contends. For that reason, he hopes headlines about the largest venture-capital investment ever, draw more investor attention, and more successful high-tech startups, to Central New York.

— Charles McChesney