Paddle8 Nets $6 Million From Team of Investors Including Damien Hirst
Observers may continue to debate the viability and potential profitability of the online art sales space, but big money keeps flowing into it. And we mean big money. The latest announcement comes from virtual auction house Paddle8, which confirmed a total of $6 million in a new round of funding from a consortium of investors including art world luminaries Damien Hirst and White Cube gallery owner Jay Jopling, along with the Mellon family, Alexander von Furstenberg, international luxury brand Mousse Partners, and venture capital firm Founder Collective.
“First and foremost they are investors but in our discussions with them we’re contemplating all the various ways we can work together, whether it's curating a sale or acting in an advisory capacity about how we partner or work with an auction house,” chief operating officer Osman Khan told ARTINFO. “They add value as mentors too. There is no shortage of ways we plan on working together.”
After initially pitching itself as an online sales platform, including partnering with major fairs such as the Armory Show in 2012, Paddle8 has since become focused solely on auctions, partnering with organizations such as the Brooklyn Academy of Music (BAM). “The trend of benefit auctions has continued and actually accelerated quite dramatically,” says Paddle8 co-founder Aditya Julka. “This model seems to be working really well,” he says, noting the company’s acquisition last year of another online auction platform, Blacklots.
Khan and Julka said the new funding is also being used for technology investments and upgrades. Paddle8 has implemented mobile bidding kiosks — essentially iPads with its custom-built software — that are placed in auction rooms. These allow bidders to compete silently for works they are interested in, as well as access a post-auction dashboard through which they can arrange payment and shipping.
At the same time, Paddle8 is expanding and announced the opening of an office in Los Angeles, a soon-to-open London branch office and three new hires, including James Salzmann, as managing director of the West Coast, Sharon Squires as a senior specialist for modern and contemporary art, and Jason Stein as a senior specialist for design, who will be based on the West Coast.
Also taking part in the investment funding is Redline Capital Management, which, last summer, made an unsuccessful bid to take over Artnet. In a somewhat confusing sidenote, Paddle8 has acquired an option to purchase a stake in Artnet from Redline, a deal which is independent of Redline’s participation in the current round of Paddle8 funding. “Redline’s exit of Artnet created an opportunity for Paddle8 to acquire a minority interest,” said Paddle8 head of communications Sarah Goulet, though she said she could not specify the deadline for Paddle8 to act on that option. “We have locked in the option to acquire the minority interest at our discretion; the decision to exercise that option will be based on strategic alignment between the two companies pending discussions.”
CORRECTION: A previous version of this post identified one of the investors in Paddle8 as Alexandra von Furstenberg. It is actually Alexander von Furstenberg.