Yesterday Artlist closed its doors although that is really just a euphemism for ceasing operations. The founder sent out an email announcing the closure through an email to the community noting that they had not been able to make it a profitable business although he still believes in the core of what Artlist does as the future in selling art from collector to collector, aka the secondary marketplace.
Artlist was able to navigate the secondary art market and had even sold a piece by Gerhardt Richters on the platform for $5m. They had multi-million dollar pieces of major artists from Calder to Danh Vo on the site. The concept was a flat commission to Artlist for 10% and they would in turn give 5% back to the artist. Maybe the number should have been higher as the auction houses can take up to 40% and the original artist rarely sees a dime. I liked where they were going but perhaps it was too soon in a market that is in need of a massive correction that from afar looks like a massive cruise ship bobbing in the ocean trying to change course.
Artlist closed with 9000 buyers/sellers on their platform. The company had made significant progress in a very slow moving vertical in the past two years. Many investors might collect art but are wary of investing in this space. There are certainly some art companies that have risen to the top (Artsy, Paddle8, Art Market Monitor) but they are still pushing to change the art world dominated by Sotheby’s, Christies, other auction houses, galleries and now the art fairs. Perhaps it was timing as raising money now is not as easy as it was a few years back.
They were about to be acquired by a 100 year old company that could use a shot in the arm, a change for the next hundred years but the company strung them along with a sub-par deal because they themselves (my guess) were scared of change. Their golden handcuffs over the past hundred years has been waning but not enough to see the future.
I was the first dollar in Artlist. It has been an uphill battle from day one. I agree with the founder, Kenneth Schlenker, that this is the future. He said “In the long run there will be a peer-to-peer marketplace for art. And I’m hoping that people can build upon what we’ve done.” So do I. Sometimes in the start-up world, the future is too ahead of the curve as in timing is everything.