You don’t need to be a sea­soned ecom­merce ana­lyst to appre­ci­ate that, in the sec­ond decade of the twen­ty-first cen­tu­ry, it’s pos­si­ble to buy just about any­thing on the web. And online cash bor­row­ing plat­form Bor­ro sees no rea­son why ecom­merce shouldn’t extend to being a high-end vir­tu­al pawn shop.

Vir­tu­al pawning

Co-head­quar­tered in New York and Lon­don, Bor­ro (which launched in 2007) recent­ly suc­cess­ful­ly closed a pri­vate equi­ty round total­ing $112 mil­lion cour­tesy of Vic­to­ry Park Cap­i­tal. It doesn’t take a genius ecom­merce ana­lyst to work out why: last year, Bor­ro made $17 mil­lion in rev­enue on the back of the $50 mil­lion it loaned. This year, rev­enue is expect­ed to hit $30 mil­lion and the loan pool is on course to expand to $100 million.

Cus­tomers need­ing cash can, if they have the items, go to Borro’s web­site and put valu­able objects up as col­lat­er­al (i.e., any­thing from fine art to fine wine, with jew­el­ry, pre­cious met­als, lux­u­ry cars and watch­es wel­comed too). Bor­ro then sends one of its spe­cial­ists (objects experts from var­i­ous fields) to per­son­al­ly vis­it the client, eval­u­ate and authen­ti­cate the item and take it back with them in exchange for cash (usu­al­ly, 65 to 70 per­cent of the item’s mar­ket value).

Cus­tomers keep the mon­ey for a set time (typ­i­cal­ly six months), fol­low­ing which they can repay it, usu­al­ly at an inter­est rate of between 3.5 and 4 per­cent. If they decide to keep the mon­ey, Bor­ro sells the col­lat­er­al – but, inter­est­ing­ly, if it goes for a price above the one con­signed, the extra cash goes back to the customer.

Growth plans

Ecom­merce ana­lysts skep­ti­cal about the poten­tial for a firm like Bor­ro to keep in prof­it might change their minds when they hear its founder and CEO Paul Aitken address the issue. He told TechCrunch jour­nal­ist Ingrid Luden that as ecom­merce matures, peo­ple are becom­ing accus­tomed to big­ger online trans­ac­tions. He said:

“We’re see­ing a lot more oppor­tu­ni­ties in the $50,000 loan plus range. If you look back three years our aver­age loan was cou­ple of thou­sand dol­lars, but now it is $12,000. Big­ger-tick­et clients are com­ing in and using our services.”

The new invest­ment will be ploughed into increas­ing the pool of avail­able loan mon­ey and expand­ing to anoth­er US office (pos­si­bly LA or Las Vegas).