The weekly US financial newspaper, Barron’s, in a blog posting Friday November 8th by Robert Milburn (“Art Auctions Head Online“) frames the current technology-driven transformation of the art market as an opposition between the traditional Goliaths, Sotheby’s and Christie’s, and the upstart Davids represented by “tiny” Paddle8. This opposition brings to mind Malcolm Gladwell’s phrase regarding his latest book, the “mighty leverage of the unconventional.”
Can an online art auction website revolutionize the art market in the same way Net-a-Porter did for fashion retail? According to the Wall Street Journal online (“Online Art Collecting Finds Its Footing“) that’s the simple proposition that led a Harvard Business School professor to write a $50,000 cheque for the founders of Paddle8. That was just the beginning of the funding frenzy for Paddle8 which at the last count topped $10m. Alongside Paddle8, the article reviews Artsy and Artspace ($13m funding) and their respective roles in “making art as easy to buy online as a pair of shoes”. However, in spite of talk of celebrity backers and how they want to ‘democratize a 200-year old industry,’ a note of realism is sounded by Jacob Pabst, CEO of Artnet:
“There are questionable business plans, there’s a lot of money going into those companies, and sometimes I ask myself if it’s not too much.”
- Read more: “Online Art Collecting Finds Its Footing” (WSJ.com 7 November 2013)
Last week Phillips, in partnership with Tumblr, Paddle8, and curator Lindsay Howard launched what they described as
“a groundbreaking auction and exhibition that brings together artists who are using digital technologies to establish the next generation of contemporary art […] the first digital art auction at Phillips, in recognition of the increasing viability of this work in the contemporary marketplace.”
So was it a success?
Alexander Zacke, CEO of Auctionata, coins the term ‘Art Tech’ to describe the current growth in art market technology companies that “leverage technology to drive the purchase of art objects.”
He then goes to list art tech companies that have attracted significant venture capital funding:
- Artsy – Investors include Jack Dorsey and Peter Thiel.
- Artspace – $8.5m. Investors include Canaan Partners.
- Paddle8 – $4m. Investors include David Frankel.
- Artfinder – Investors include Reid Hoffman, and Wellington, Northzone, and Greylock.
- Auctionata – $20.2m venture funding.
With significant disruption in the market, it’s wide open for new technology companies:
As more and more resources are dedicated to this industry and companies continue to improve their technology and business models in this space, anyone who wants to compete should get in sooner rather than later. The market is ripe for further investment, disruption and growth, and the time is now.
Read the full article here: The Birth of Art Tech – Alexander Zacke – Voices – AllThingsD.
Paddle8 is an online auction house, connecting buyers and sellers of fine art and collectibles across the world. We offer two types of auctions: monthly themed auctions, and benefit auctions in collaboration with non-profits.