Paddle8 and Auctionata Announce Surprise Merger
The fused company has yet to announce its new name.
Online auctions start-ups Paddle8 and Auctionata have announced today that the two companies will join forces and will cater to what they define in a statement as an “underserved” middle market.
Both Paddle8 and Auctionata have independently pursued the middle sector of items valued up to $500,000—Auctionata in Europe, with live streamed auctions of vintage luxury items; and Paddle8 in the US, with curated auctions and benefit sales of contemporary art.
In 2015, the two companies reported combined sales totaling over $150 million; their joint user base numbers at just under 800,000, with registered accounts in 200 countries. According to the press release, the newly formed company will thus lay claim to being one of the top auction houses in the world, outside of China.
“This merger allows us to allocate greater resources toward innovating at every step of the collecting process, from online valuation services to post-sale fulfillment, and to expand our current offerings in terms of both categories and sales channels,” said Aditya Julka, co-founder of Paddle8, in a statement.
While the financial terms of the deal were not disclosed, the companies confirmed that all co-founders will remain in strategic and operational roles. Alexander Zacke, previously CEO of Auctionata, will lead the global management team of the newly formed group, which will carry the names of both the Paddle8 and Auctionata brands.
This past April, art insurer Hiscox released its annual report on the online market, for which it surveyed some 672 art buyers, who ranked Paddle8 as fifth and Auctionata as ninth among existing online art-buying platforms (artnet is listed third).
Both companies have raised funding from high-profile investors, which will all remain involved with the new, as yet unnamed company.
Fashion billionaire Bernard Arnault is an investor at Auctionata, which has raised $88 million in equity capital to date. Paddle8, meanwhile, has raised $44 million with investors, including artist Damien Hirst and dealers David Zwirner and Jay Jopling.
Although deeply connected to the art world, Paddle8’s most talked-about auction was of the sole copy of the Wu-Tang Clan’s final album, which went for $2 million to former pharmaceutical executive Martin Shkreli, and carried with it a protracted copyright lawsuit.
News of the fusion comes on the heels of a negative report by the auditors KPMG in which the management of Auctionata was accused of serious trade violations.
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