Major Buy Now Pay Later (BNPL) company Art Money has paused operations after its CEO and founder Paul Becker revealed he had “fallen short” on one of his key jobs: “Don’t run out of money.”
The company, founded in Australia in 2015, will not finance any new art purchases or accept any new applications for art credit as it looks for new funding, it said on Friday.
“After almost 10 years of successful growth, we’ve made the difficult decision to pause new business operations while we recapitalise,” Becker said in a statement.
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“We’ve faced a perfect storm of related events.”
The world’s only global art fintech company, like typical BNPL companies, requires large amounts of investor funding so that it can pay sellers before it gets paid from buyers.
Art Money blamed the economic downturn and its impact on the art market and equity markets, as well as higher interest rates, for its financial woes.
“The business I founded, Art Money, has run out of operating capital, and I’ve let down a lot of people who believed in it, and in me,” Becker said.
In the last decade, the company said it had secured US$100m debt finance and “raised US$10m equity investment from over 135 investors, including Christie’s Ventures.”
But the company would need another US$5m in equity investment to remain profitable until the end of next year.
It confirmed that “all galleries, artists and art sellers have been paid, or will be shortly” — the money for which, it clarified, comes from “a different bucket of money.”
Professionals with high disposable incomes are the main Art Money customers, and Becker said the BNPL model “is about psychology, not affordability.”
“Most of our clients actually have the money. However, art is a discretionary purchase, and most people want to buy it in a responsible way. They’re using Art Money as a psychological enabler.”
Becker said the future of the company is unclear, but called for a “coalition of the willing” to help fund it.
“It’s been bootstrapped since inception, and we’ve achieved a lot with a little. While the model is now proven, and common in every other industry except art, the business cannot go to the next stage and realise its potential without sufficient equity capital,” he said.
“I don’t know what’s next, really. We still have the potential to be a $1bn business if we get it right.
“I remain positive.”
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