Paul Becker; supplied
Established in April 2015, Art Money is a Sydney-based company that now has offices in New York and sights on London.
Branded simply, ‘The new way to buy art’, Art Money is like an old-fashioned lay-by but you get to take the art home. After paying a minimum 10% deposit, payments are spread over 10 months, interest free, while Art Money ensures that the gallery – and the artist – are paid up front.
ArtsHub recent caught up with Art Money CEO Paul Becker, who was adamant that Art Money was not a finance company – it is an arts business.
‘We are in the business of culture change,’ Becker said.
The company’s journey of change has been rapid. ‘When we started, I didn’t envisage the scale of the ambition we have now,’ Becker explained. ‘We launched in Sydney; very quickly the rest of Australia said, “can we be part of this?” New Zealand came about 18 months later. It was really a test market before we went to the United States.’
He continued: ‘Looking back it now seems ridiculously early. We wondered if there was a global opportunity – to change this industry on a global basis. We decided that we could. That was the big line in the sand. We could have had a very comfortable business in Australia, but the decision to launch in the US was the first step to becoming a global business.’
Becker notes that the art market is global by its very nature. He also makes the point that Australia is 1% of the global market, while America is 40% and the UK is a 20%. Art Money is working towards launching in the UK in two-years time.
Why the US, not a neighbouring Asian market?
Becker said simply, ‘We went for market size.’
He said that while the company did investigate a move into the Asian market, it was more fractured geographically and in terms of regulations. ‘Each country has a big legal and regulatory set up hurdle, so it was a “no brainer” to [target] those larger market shares,’ he told ArtsHub.
‘If we prove it in America, then we have a global business, and we were also first to market – we are still the only ones in the world doing this,’ said Becker.
He explained that moving into the US art market was really ’50 different markets’.
‘You tell me where the sale takes place – a Californian gallery going to the Miami art fair which sold to a New York buyer?’ he said.
Art Money is currently operating across five target states including New York and California. Becker added that those five states represent 80% of the US market.
Image courtesy Art Money
It’s not about finance; it’s a psychology
How does Art Money work? You apply for credit with Art Money. Select an artwork; take your art home, and pay for it later. Art Money pays the gallery upfront, who also pays the artist immediately. It is a win-win model.
‘We don’t call them loans – it is credit,’ said Becker. ‘It is empowering behavior. People feel responsible; people feel less self-indulgent that they buying art, and they are managing their passion. So it is not about finance or affordability; it is about psychology.’
‘Whether buying an artwork for $1,000 or $10,000 it is the same psychology,’ said Becker. Art Money will be at Sydney Contemporary (12 – 116 September) where works are available from as little as $500.
Becker said that the company’s biggest clients are in their 30s and 40s, and more than half of them have an income over $100,000. ‘Some collectors have five or six works on the go at once, but most people have one work and pay it down and then buy another,’ he added.
‘30% of our clients are buying their first work ever from a commercial gallery – and that is a growing market. Another 30% are regular, what might be described as “true collectors”, and the group in the middle are what I would call occasional buyers.’
Since starting in 2015 Art Money has facilitated about $10 million in art sales, with half of that in the last year alone.
Art Money at art fairs; supplied
The challenges of a culture change
Becker describes: ‘We are in the business of culture change. And in terms of a brand, we are an art business. That is the reason why we believe we can support and grow the art market on a global basis – we are not trying to take away from the industry; we are trying to add value to the industry.’
He said that by nature the art world is scared or skeptical of the finance world, adding that the greatest challenge has been growth itself. With that growth comes the need for more capital.
‘The more successful we are, the more money we need for our debt book because we are paying galleries before we get paid – so if we do $10 million in sales we need to borrow $10 million to pay up front,’ said Becker.
‘This is something new, but all we are doing is bringing best practice finance to the art world. The art world can be very conservative in its business practices, and so change is not something it does well.
‘An analogy I use is art fairs – a generation ago there were five art fairs, now there are 250-300 internationally. When they first came in people would say that is a supermarket, a trade show, but nearly half of all gallery sales are made at art fairs around the world today – that is around 45% of gallery sales,’ he said.
‘It is just a standard part of doing business, and that took a generation to become accepted practices. So what we are doing is that same kind of level of generational change – making it OK to talk about price, making it normal,’ Becker told ArtsHub.
With regard to the threat of competitors on the global market, Becker believes Art Money has strong barriers to entry because it is an art business.
‘We are solving pain points in the art world rather than coming from the outside and trying to take a slice out of it,’ said Becker. ‘Our relationships are about helping artists and buyers – we are not just a finance product. We are ultimately about having a relationship with the buyers,’ he said.
Advice on starting collecting…
Becker said that Art Money is all about removing barriers. ‘Just take the first step and start looking – it is free and it is fun to look,’ he told ArtsHub.
‘Go to art fairs – you can see great diversity; look on Instagram and go to galleries. Just start learning your taste and trusting your judgement, and most importantly understand that there is no right or wrong. You have to go with your guts; it’s not about asset valuation – it is about finding what you love,’ he concluded.
