A creative entrepreneur in Sydney is raising $2 million to grow one of the world’s first lending platforms for art collectors.
Art Money lets people borrow up to $18,000 interest-free to purchase artwork from local galleries.
The startup’s founder and CEO Paul Becker believes the platform will kickstart trade in the art sector by enabling more people to purchase art.
“That will grow the art market internationally,” Becker tells StartupSmart.
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After 25 years in the industry and heading events, publishing and art exhibition company 10 Group as CEO, Becker says there needed to be a solution to break down long-standing barriers keeping people out of the market.
“Everything we’ve been doing is about increasing engagement with contemporary art,” Becker says.
“Art can be an intimidating space, there’s a lot of things in the industry that make it hard for people to see and buy art.
“Art and money have always had an uneasy relationship.”
Applying for a loan on Art Money takes under 10 minutes, says Becker, and it requires customers to provide standard information to get a credit score.
“Art Money takes the risk on the loan,” says Becker.
Once a loan is approved, buyers pay a deposit to the gallery and collect their art, and then they pay the remaining amount slowly to Art Money over a series of 10 payments.
Meanwhile, Art Money pays the gallery for the artwork in full within ten days so the artist can get paid faster too.
“The artist is the poorest person in the whole chain,” says Becker.
Art Money generates revenue with a discount from the gallery on every art work sold through its lending platform.
With this system, Becker hopes more works will move in and out of galleries.
Building a global lending platform for the art industry
In little over a year, Art Money has loaned more than $1 million to art collectors across Australia who have purchased works from over 150 galleries.
It also recently launched in New Zealand.
In two months, Becker and his team will break into the US but they want to hit big and make Art Money the world’s leading destination for this type of lending.
The US currently dominates the global art market with an 8% lead on China, which holds 30% of the pie.
“To get into the US market, there’s acquisition costs, legal and compliance costs,” Becker says.
“There’s 50 different rules for 50 different states so that was something we wanted to do in a fairly strong way.”
To help them on this mission, Becker is actively raising $2 million, including $300,000 through equity crowdfunding platform VentureCrowd.
Quickly learning the importance of “smart money” and finding the right investors who can deliver more than dollar value, Becker is carefully selecting the best partners to join him on Art Money’s journey.
“[Finding investors] is an art, not a science,” he says.
“We’ve got a nice mix of art people, tech people and finance people.
“It’s nice to have a combination of all those and people who have built startups before.
“Sometimes, you have to say, ‘no, you’re not the right fit’ which is really hard.”