April 5, 2023
Australian Financial Review

Aussie start-up turns professionals into art collectors


The founder of Art Money says a new investment with British auction house Christie’s will fast-track the local lender’s global ambitions, as its product helps vault professionals into the orbit of wealthier fine art collectors.

Art Money was founded in Australia in 2015, and has established a lucrative niche in the instalment financing market by applying it to art purchases. It means professionals on decent salaries can purchase pieces that would previously have stretched their limits.

Art Money chief executive Paul Becker relocated to London last year, recognising that the opportunity to become a global financing option for galleries and auction houses could be best served from there, and scored one of the first investments from a new venture capital arm set up by the 257-year-old auction house.

“The Christie’s investment validated our business model and confirmed to the industry that this is the future of the art market,” Mr Becker said.

“The real benefit will be the commercial partnership we are putting in place with them, which will give us access to an exponential $1 billion addressable market within a year.” This partnership is still not formalised, but will eventually mean that Art Money becomes the payment plan option for all sales at the world’s biggest auction house, while also being free to operate with other auction houses, galleries and art sellers.

Customers pay for artworks in 10 monthly instalments, with no interest. There is an official ceiling of $100,000, which is stretched for certain cases. Mr Becker said the highest purchase so far facilitated by Art Money was for a painting in the US market that sold for more than $500,000.

“Christie’s want us to be able to go a lot higher,” he said. “There are a lot of people in the market that do asset-based lending for pieces worth more than $1 million, and they want Art Money to be available for all their clients from below a million dollars, because they can’t do that.”

Since its inception, Mr Becker said Art Money had handled total art sales of $US56 million ($83 million), with roughly 60 per cent from Australia. This has involved 16,000 artworks being sold to 7000 clients.

Don’t call it BNPL

While it may sound like Afterpay for the art gallery set, Mr Becker baulks at being called a buy now, pay later company because of what he says are the associated negative connotations.

He said he overwhelmingly supports the idea of bringing BNPL under existing credit laws, adding that Art Money obtained a credit licence from the Australian Securities and Investments Commission before it launched, and had a California credit licence before Afterpay.

“We already have a credit licence and do rigorous checks on our clients including face biometric and AML/KYC for every single onboarding,” Mr Becker told AFR Weekend. “If you are making 30 per cent of your revenue from late fees, then to me, you are in the business of getting people in trouble, whereas we make zero per cent of our revenue from late fees.”

While paintings are the most common form of purchase made via Art Money, Mr Becker said it was backing the buyer rather than the asset, and that it was not the arbiter of what counts as art. Therefore, he said it was likely to expand into different forms of high-value items and collectables.

The company is in the final stages of a funding round. Despite having Christie’s on its capitalisation table, Mr Becker said it was predominantly high net worth investors and family offices backing Art Money.

By Paul Smith

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