A major Australian art fintech is teetering on the brink of collapse after being forced to halt business operations.
Art Money, a ‘buy now pay later’ platform for the art world which is used in over 50 countries, revealed it had made the ‘difficult decision’ to ‘pause business operations’.
Paul Becker, the company’s Sydney-born founder and CEO, said he needed another US$5 million (A$7.6 million) to stay afloat and achieve profitability by 2025.
‘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,’ he wrote in an email to customers, seen by news.com.au.
The platform was designed to allow customers to buy art costing anywhere between $500 up to $1 million through interest-free payment plans.
The business, which launched over a decade ago,had partnered with over 2,000 art galleries across the globe and allowed customers to buy 20,000 pieces.
But now existing customers can’t make any more purchases and new clients can’t apply for finance.
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Mr Becker said that founders had three essential responsibilities: set and communicate the vision, build a great team and don’t run out of money’. ‘After 10 years and with clients from 4 countries, I’ve fallen short on job #3,’ he wrote.
Mr Becker blamed the company’s problems on a ‘perfect storm of related events’.
Namely, the art market contracting amid a global economic downturn, a lack of growth capital and rising interest rates impacting profitability.
‘Whilst 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,’ Mr Becker wrote.
‘It ideally needs a combination of strategic partners from the industry, a “coalition of the willing” if you like, that are united in growing the art market for all stakeholders to benefit.’
The entrepreneur said he was not sure what was next but that he remained positive and invited potential investors to get in touch.
