Two tabloid-fodder investors. Two companies with $75 million in funds raised. Two unusual ideas.
The startup world saw celebrity cash thrown at wildly different companies with wildly different ambitions Wednesday. Baseball great (or cheat, depending on who you ask) Alex Rodriguez was among backers of an effort to create a “stock market’’ of pro athletes. Socialite and ever-present TMZ character Paris Hilton went in on a company that wants to bring the Wooly Mammoth back from 4,000 years of extinction.
Paris’ Prehistoric Lazarus
Whether it’s George Clooney, who reportedly made over $200 million from a $600,000 investment in tequila brand Casamigos, or Dr. Dre pocketing hundreds of millions from the sale of Beats Electronics to Apple, plenty of wealthy celebrities have become even wealthier investors. They also make bad bets — just look at the 21 celebrity-affiliated SPACs that posted negative returns in 2021, including Jay-Z’s The Parent Company.
What stands out about Wednesday’s announcements is the lofty ambitions of the companies involved. A-Rod and Paris are swinging for the fences:
- Mojo, which Rodriguez is backing alongside VC firm Thrive Capital, is trying to build a new kind of financial product in a platform like Robinhood. Fans will buy values associated with sports players that go up or down depending on how well they play — no word yet on what happens to a player’s value if, hypothetically, they get suspended for a year for doping.
- Colossal Sciences’ goal to bring back the Wooly Mammoth through genetic engineering, which has Hilton’s support, may sound crazy but the company has serious talent and a seemingly practical rationale. Harvard University geneticist George Church is a cofounder and he argues, if the species returned to the northern tundras of Canada, Alaska, and Russia, mammoths would stomp down permafrost, keeping it frozen and preventing the release of carbon dioxide that contributes to climate change.
One Strike Down: The first month of legalized online gambling in New York state drew $2 billion in wagers, which Mojo could argue bodes well for their product. But the last time a company tried to launch an athlete stock exchange, it ended in failure for Fantex, which shut down its platform in 2017 due to limited trading activity. Most investors had 10 or fewer shares.