Masterworks, an online investment platform founded in 2017 that sells blue-chip art stocks, received $ 110 million in an initial round of funding from New York-based venture capital fund Left Lane Capital and other investment firms, including Tru Arrow Partners and Galaxy Interactive. . With this round of funding, the company said it is now valued at $ 1 billion and marks a milestone for the platform, which has seen its member base grow steadily over the past year.
The 100-employee member-only platform, headquartered in New York’s Tribeca neighborhood, allows investors to buy and sell shares of major works of art by Jean-Michel Basquiat , Keith Haring and Pablo Picasso, among others.
The platform seeks to tap into the estimated $ 1.7 trillion art asset class, according to Deloitte’s 2019 Art and Finance report. The contemporary art market has appreciated at a rate, for more than two decades, greater than that of traditional assets such as real estate.
âArt is among the largest remaining asset classes that have never been securitized,â said platform founder Scott Lynn. The New York-based entrepreneur will direct the funds from the investments to growing the business, including costs related to distribution and financial advisers.
Lynn, a seasoned art collector, is no stranger to the industry, having amassed a collection that includes major post-war artists like Clyfford Still, Barnett Newman, Mark Rothko and Willem de Kooning.
Tru Arrow Partners director Glenn Fuhrman, who is also one of the world’s leading art collectors and founder of the FLAG Art Foundation in Chelsea, noted that investment in art at the highest level was historically only accessible to the ultra-rich. Today, Masterworks seeks to disrupt the trend by bringing fractional investments in art into the mainstream, which Fuhrman says will meet a demand that has long been unfulfilled.
In an interview, Furhman said ARTnews, “I have a firm belief that art is a legitimate and very viable investment asset class and that it just needs to be democratized.”
Harley Miller, founder and managing partner of Left Lane, said in a statement that other investment firms have invested capital in other âalternative investment spaces,â which range from sports memorabilia and pop culture to retail – and now to s. âWe wanted to invest in a company operating in a fundamentally much larger, more unique asset class with proven appreciation rates over decades,â he said.
Unlike luxury collectibles, Furhman believes that the historical value of fine art makes it a more attractive asset. âIn the end, art has stood the test of time, as something that can be appreciated over the centuries,â he said.
In October, over 200,000 members signed up for Masterworks, which also includes historical sales data to better gauge what an artist’s work could earn. Of this group, some 15,000 members have purchased shares of works of art that are traded on the platform. The company acquires each individual work and registers it with the United States Securities and Exchange Commission (SEC). From there, investors can buy shares in pieces.
Investors in the platform claim that Masterworks, which has a low minimum financial requirement to invest, has the potential to attract a wider audience to invest in art. Sam Englebardt, Galaxy Interactive Partner, said: âFinancial inclusion and empowerment are fundamental principles around which Galaxy was founded.