As Online Art Auction Space Shrinks, Is Artsy the Heir Apparent?

The fine art platform recently added Expedia founder Rich Barton to its board and will quadruple auctions in 2017

Artsy. Creative Commons

The 27th floor of an airy TriBeCa office building is dotted with small potted plants, the bare white walls a stark comparison to the fridge, which is stocked to capacity with La Croix and hummus.

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While I’m visiting, a gentleman who reports he has only had two jobs in his life, so probably can’t be over 35, tells me he thinks he’s the oldest person who works here. If you hadn’t guessed, this is a startup. We’re in the home of Artsy, one of the many fine art tech firms that has the word “art” in its name. It’s a trend that can make them hard to distinguish. But perhaps not for long.

It might be easy to mock Artsy for its young, and well, artsy staff, whose FOMO-inspiring instagram shots cloud every art worlder’s feed. Not to speak of its glib name and on-the-nose carbonated beverage choices. But it’s looking like the emergent winner in the battle of the art auction and information start-ups, of which it is practically the last man standing.

In recent struggles, Berlin-based Auctionata filed for the equivalent of bankruptcy late last month and spun off Paddle8, another competitor with whom it had merged in May of 2016. Artspace, the online art sales startup in which billionaire Leon Black invested in 2014, laid off its entire editorial staff last month, leaving only the marketing and sales departments (and questions). Artlist, another start-up platform that combines art trades and data, laid off all employees last summer and only earlier this month sold its remaining assets to the more established Artnet. Meanwhile Blouin Art Info, an art world stalwart and publisher of noted art mags, has been experiencing a protracted meltdown while attempting to develop an art sales web product with the alarming name BlouinShop.

And then there’s Artsy. Last year, the platform participated in 41 auctions. Graham Newhall, the company’s associate communications director, said they expect to quadruple that in 2017. Rich Barton—a tech baron who founded or co-founded Expedia, Glassdoor and Zillow—and Bob Pittman, former CEO of MTV and AOL, just joined Artsy’s board at the end of January. And the office fridge seems to speak for itself.

What did they do differently? Newhall suggests that perhaps the mission of a successful fine art start-up is “not to disrupt,” but, instead, to help out. “It’s collaboration. We want to give [collectors] the information” to make a smart art purchase, he said. The artists’ auction numbers, their gallery representation and notable works—all available on the Artsy site—are all part and parcel to the actual bidding and part of Artsy’s three-pronged business model. In addition to facilitating auctions, Artsy boasts an editorial staff of 13 who operate independently, and is developing software that can predict what artworks you’ll like—situating it in the midst of a variety of art-related businesses. Still, it’s not clear how different the basic idea is from those of other start-ups that fell by the wayside.

Providing buyers and collectors the information they need, as Newhall said, is one of those tricky things. Just as Streeteasy came along and changed real estate brokerage in New York City, so too could a comprehensive set of data on art pricing and sales alter the fabric of auctions. The art trade has relied on opacity and relationships for more than a hundred years. The powerhouse auctioneers have built their contacts for at least that long. It’s easy to see how an industry with this engrained mediation might not want the information to be available to everyone. And Newhall admits there was resistance from galleries at first.

“It was the Facebook model,” to get galleries to sign on, he said. The social network started at Harvard and slowly integrated other schools into the site. Artsy, similarly, focused on convincing the biggest names in the gallery space, and then began rolling out to everyone after some big names signed on (and now Artsy counts names like Gagosian and David Zwirner among those that work with the site).

The vision of a Princeton-educated computer scientist, Carter Cleveland, and a former Christie’s exec, Sebastian Cwilich, the Facebook analogy might not be a huge stretch. Artsy’s funding—which they report totals $51 million in series A, B and C—has come from some of the more savvy investors in the start-up game at the moment: Peter Thiel, Wendi Murdoch, Joshua Kushner, Dasha Zhukova and Jack Dorsey. And it’s continuing to expand—there were 24 open jobs on the company’s site as of today. In 2016, some notable art publications didn’t send a single reporter to Art Basel Miami Beach, the largest U.S. art fair. Artsy sent about 50 staffers to Miami.

While waiting to meet me in a conference room (with a totally uninhibited view of the Manhattan skyline), it happens that Artsy staffers decide they’d like to see what’s going on with a day sale of prints at Chicago-based auction house Wright that’s going on at the moment. As the bids dance around on the screen in real time, it becomes evident that there’s a bidding war at hand. The Kara Walker print had a high estimate of $3,000, but after a few minutes of watching the bidders wrestle for the top offer, the work ends up selling for more than twice that after heavy bidding both on the floor in Chicago and via Artsy. (It sold to someone on the floor in the end, which disappoints the Artsy staffers).

It’s an uncanny demonstration of just how easy it is to use the Artsy platform, and of the way it can produce something close to the excitement of a live auction, albeit on your laptop. I imagine a collector sitting on his toilet, buying Koons sculptures via iPhone before switching to Ameritrade to reallocate.

A number of serious collectors who declined to be named said they’d used the site or the app to bid and buy works, and found the interface easy.

Sculptor Mary Rieser Heintjes said it was an honor when her gallery, the Carter Burden Gallery, asked to put her work on Artsy and that it’s been fantastic for her profile as an artist.

“I understand and appreciate the attention to detail and pure quality required by Artsy for their website,” she said. “The site also demonstrates the bond of the artist to their gallery.” She found the interface and look of the site flattered her work, and believes it will facilitate sales.

Phillips, the more than 200-year-old auctioneer, allows bids from Artsy for a number of its auctions and has seen a “real impact” since rolling out the partnership last year, said Megan Newcombe, director of digital strategy at the auction house.

“Digital sale channels have become of paramount importance for Phillips,” Newcombe said. “Our clients are ever-increasingly tech savvy, and decide to participate online as a matter of clear personal preference… Artsy has made a real impact.” She said winning bids in Phillips’ auctions placed via the internet have doubled in the last year.

Artnet, meanwhile, (which also sent a prodigious cohort to the beach last December) continues to expand its online auction business and is also “aggressively hiring,” in the wake of acquiring Artlist, perhaps hinting at coming face-off in the online auction and art information space. Indeed, when Artnet purchased art analytics start-up Tutela Capital S.A., a company run by a statistician and former BNP Paribas trader, last November, The Art Newspaper dubbed it the start of an “art data arms race.”

It’s not at all clear if Artsy, a start-up with notable names backing it and no plans for an IPO, according to the company, or Artnet, a publicly traded company that has withered the ups and downs of the art market for decades, has the better approach to becoming the comprehensive art sales and data site. But perhaps there is enough space for both. After all, the pool of aspirant collectors seems inexhaustible.

As Online Art Auction Space Shrinks, Is Artsy the Heir Apparent?