What Christie's investment in Art Money means for Australian artists
POSTED 20 Feb 2023
Art Money CEO Paul Becker reveals what it means to bring Christie’s on board this Aussie-founded, global marketplace for art.
Christie’s Ventures, which kicked off in July last year, is a venture capital arm of the global auction giant. Art Money is among its first fintech investments. Clearly, a coup for the Australian art business – which allows collectors to pay for artworks via interest-free instalments, while living with them – it is also a global signal of market confidence.
ArtsHub caught up with entrepreneur Paul Becker, Founder and CEO of Art Money, ahead of boarding a plane to London, to ask what the investment means for Australian artists and galleries.
‘This industry validation from one of the art market’s leading brands is a game changer not only for Art Money, but also for the Australian art community,’ says Becker. ‘We have an incredible opportunity to make change for the better in the art world – building a sustainable creative economy – and I am 100% committed to achieving that long-term vision, alongside the right investors who can help us achieve it,’ he tells ArtsHub.
Becker says the deal has two big benefits for Australian artists. Immediately, ‘the accelerated adoption of Art Money in the primary market, will directly support artists to sell more works at higher price points,’ he explains.
‘Second, in the long term, we aim to change the paradigm that most artists do not benefit from secondary market (auction) sales.’ Breaking that down, he says, ‘I see working toward an industry-wide global artists resale royalty program as an important step toward a sustainable creative economy. We are currently working with partners, such as Art Basel-backed [blockchain] Arcual, to bring this to market, and a close relationship with partners, such as Christie’s, will only help this vision come to life in the long term.’
Becker admits that while ‘we are not there yet, we want to open up those pathways’.
Let’s talk dollars
AFR reports Art Money is expected to gain access to ‘a $US1 billion slice of Christie’s annual sales in the coming 12 months’. Becker says that ‘while nothing is guaranteed’, on paper (and at the current products and price points in the UK and US), ‘US$1 billion would in theory be the “addressable market” for Art Money through Christie’s sales alone’.
In return, Christie’s gets a RegTech, finance and payment solution for its art buyers, at a time of regulatory change. Just to be clear about this deal, the Christie’s Ventures investment is for a non-controlling equity stake. In layman’s terms, Becker explains, ‘They have bought shares in Art Money, as over 100 investors have, including many from the industry. They don’t own us, they don’t have control, they don’t have a board seat [and] they don’t have any more influence than any other major strategic partner would.’ Essentially, it is a commercial partnership.
Becker says, ‘The bigger picture is that we want Art Money to be the default way people [use] to buy art whether that is through finance (interest free or buyer’s premium), RegTech (AML/KYC) or (in future) payments.’
For those of you new to these terms, RegTech (Regulatory Technology) is a booming new industry of tools to help companies and organisations navigate the rising tide of regulatory compliance. Anti-Money Laundering (AML) and Know Your Customer (KYC) is the process of obtaining and verifying customer identity to prevent financial crimes.
Complex stuff, given the rate of change in fintech circles and the global art business, which has largely suffered from loose regulation. Becker adds that they face ‘one further regulatory process, which we expect to complete this year’ to bring Art Money up to a level to escalate the growth they imagine.
He continues, ‘Our commitment to artists, galleries and the primary market remains undiminished, and Christie’s investment will help accelerate that. They are a smart and engaged partner, understanding that their investment in Art Money is going to accelerate impact across the whole industry, not just for them.’
Christie’s Ventures was prompted by a desire to stay relevant. ‘The whole idea was that they are this 250-year-old company, and all this exciting tech was happening. They could either watch it go by, or be part of it. This investment in Art Money is them betting on the future,’ says Becker.
What comes with the name Christie’s?
Christie’s is about as big as it gets in the art world, with global sales worth $US8.4 billion in 2022, according to AFR. While this may be a good enough reason to jump into bed with the mega art company, Becker says the investment has followed extensive due diligence and a six-month engagement process.
He adds that while he, ‘can’t go into too much detail’ on the deal, he can tell ArtsHub that, ‘essentially they want to have first option to offer Art Money to their own clients to help convert sales and increase price points’.
Becker views the proposition as a global marketplace, which can only be a win for Australian artists. He admits that when Art Money opened its current Series A-2 capital raising round (which closes with the end of this financial quarter), it ‘knocked back a number of potential investors’.
‘Because we felt that they might compromise our vision. That is something I am trying to actively manage,’ he says. ‘I’m determined to get it right and, if we do get this right, it is going to be pretty powerful.‘
When asked what the greatest challenge to this new partnership may be, and whether there is a need to be mindful that Art Money does not get “swallowed up” by the mega brand, Becker says he is confident the arrangement will work in Art Money’s favour. ‘The fact that Christie’s is a minority non-controlling stake is important for retaining our independent global brand of trust. I have got to know some of Christie’s senior leadership team during this six-month engagement process and I am convinced they will be a great partner – aligned and future focused,’ he explains.
In a formal statement this past week, Devang Thakkar, Head of Christie’s Ventures, said: ‘We were very impressed by the thoughtful approach Paul and team took to building out a sustainable and integrated business model that we believe will usher in fully portable, dedicated financing for all participants in the art markets across all price points.’
He continued: ‘Christie’s has long championed access and ownership to the arts for everyone and Art Money will play a crucial role in affecting that vision.’
The deal comes ahead of new regulations and anti-money laundering nets for the global art market, which are expected to be rolled out in the coming years.
Widening the net on buying art
What started out as a great idea by a small Sydney-based start-up in 2015 – when ArtsHub first caught up with Becker – has now grown to encompass 1700 gallery partners from 50 countries and 6800 clients, growing daily, across the US, the UK, Australia and New Zealand.
In a nutshell, it makes it easier for people to buy art they love, allowing them to pay off an artwork via an instalment agreement. The cherry on this savvy concept is that gallerists and artists get paid immediately. Art Money – and now with the added capital from Christie’s Ventures – covers the sale upfront.
To date, the business has been backed by a handful of investors, with Becker holding a substantial stake.
‘I don’t think Christie’s will be the last … to invest in Art Money as we grow. Essentially we want more people to be able to buy more art from more art sellers and through more channels and buying situations,’ he concludes.
Christie’s Ventures pretty much came to light as crypto currency crashed, offering an alternative stream to help start-ups to accelerate their build-out of their ideas. It also allows the traditional auction house to broaden its own offerings into the tech field.
According to its website: ‘Christie’s Ventures will start by exploring three broad categories: Web3.0 innovation, art-related financial products and solutions, and technologies that enable seamless consumption of art.’
While NFTs may have been such a pathway, The Wall Street Journal reports that Christie’s own sales of NFTs fell from US$93.2 million during the first half of 2021 to less than $5 million during the first half of 2022.