A wealth manager, a technologist, an angel investor, and an art patron walk into a bar, what do you get? No, seriously, what do you get? While this may sound like a joke to some technology investors, to those who have been grappling with how to drag the $55 billion art market out of the dark ages and into modern asset management practices it is no joke. In fact, it is as close to the holy grail as we are likely to see in a $55B global annual marketplace that has largely remained unchanged in the last 370 years.
The five-year saga to launch ATO Platform – a souped-up, tech-abundant asset management solution - is a harrowing story that will make for a great novel one day. Spoiler alert: the final chapter shows the triumph of financial logic and price transparency over greed, pricing intrigues, and economic exclusion. The ATO Platform has been built to lead in the areas of art sales tracking and authentication. Its mission – one that even James T. Kirk would have shied away from - is to broadly apply technology and asset management practices to support artists, encourage fair dealing, and create a sustainable distribution of profits within the arts ecosystem.
ATO is transforming the market by addressing the pricing information problem that has plagued the art world since the 1650s when intermediaries – art dealers – came on the art scene. With unregulated intermediaries, there is a near total lack of accessible sales data from which to price for the fair buying and selling of art.
Of course, the recent explosion of counterfeits is also an issue. And the pressing down of the artist such that it is largely those who trade in the artists’ life work who make the profits, is an issue as well. Both of these issues are however much more recent; counterfeiting and the exploitation of artists only really took off in the 1860s and 1870s.
To say there has been a demand for this type of solution is a gross understatement. Why has it taken so long? For the exact same reason that 96% of the companies from the 2016 FINTECT BONANZA failed. The Art Economy is not easy. Even the most silver tongued, over-capitalized technologists won’t succeed just by “showing up and teaching the art industry how to use technology.” The players in the industry are extremely well entrenched. A frontal assault on the business of art – just like so many FINTECHs tried to assault the financial markets – simply won’t work.
First, a workable business model needed to created. The vision - artists, dealers, and collectors each had a path to a better business. The development - long, hard, complicated, and requiring several drawings and rewirings. That’s what the last five years have been spent on. The platform serves artists and encourages fair dealing through transparent sales data and artist resale royalties. It discourages, or rather can help rapidly erase counterfeits, through community-backed and artist-supported tracking. In simple terms: it authenticates, tracks, and provides artists a highly-motivating, valuable new income stream.
ATO supplies artists’ need for capital by giving them the financial resources and tools to manage their creative careers and bodies of artistic works. And of course, the financial windfall for patrons and collectors is very attractive. What was once an uncertain, untraceable, and hard-to-price collection may now be managed much like any of their other investment portfolios. With ATO, buyers and collectors leapfrog from having an unverifiable price on a hand-written tag claiming authenticity, to having an authenticated Bloomberg-styled detailed investor’s report on their painting, their sculpture, and other object d’art in their collection.
The core of ATO’s mission is to advance artists’ careers while demystifying the experience of collecting art. Founder Carrie Christine Eldridge has developed the company’s holistic business model advised by an impressive list of executives, board members, and advisors. This is not your usual “new venture team”. Lisa Koonce - Advisor with 35 years experience in the art industry, Monica Pajarin - Sales Executive with 12 years art sales and gallery Director experience, Bennet Grutman - Chair of the Board with over forty years experience in the art industry, blockchain governance prepared by Prysm Group - an economic advising firm which conveniently has the 2017 Noble Prize winner in economics on the team. The company’s Chief Technology Officer, Benjamin Stewart, formerly from UBS and Betterment, has launched the platform on Polkadot’s parachain, Moonbeam. The technology strategy: be secure and responsive to new developments within the blockchain space, advancing with the technology adoption, not maintain old version 1 and version 2 blockchain approaches.
Eldridge is a former wealth manager at Morgan Stanley and one of the very few black female founders in the blockchain and art space. Research shows a staggering financing gap between male and female start-ups. The latter receive up to 50% less funding, and male founders vastly outnumber female founders. Business Insider notes that as of 2020, only 93 Black women had raised $1 million or more in venture funds. The statistics for founders of color are dire. Eldridge comments: “We leverage technology to provide equal opportunities for artists. Statistics on representation of female and BIPOC artists are discouraging. Artists want to be recognized for their vision, not burdened with clearing additional hurdles based on their gender or the color of their skin. The same goes for tech founders.” To date ATO Platform is funded by art industry insiders, the executive team and individual blockchain-savvy investors. Other key team mates include a robust list of blockchain engineers, artists liaisons, accountants and the full staff you would expect from an "Avengers type" group uniting.
ATO’s primary revenue streams are from the tagging and tracking of physical and digital art, and a share of the royalty collections made on behalf of registered artists and their artworks. According to ATO’s survey of 3,000 artists, over 89% are willing to pay between $50 and $300 to record the authenticity of their work and thus have the ability to receive a royalty when their art is resold. Eldridge predicts: “The market potential is massive. By acquiring 0.1% of the target market of just contemporary artists, ATO earnings will exceed $270M per year by Year 7 post-launch. Active since 2016, ATO has consistently been at the forefront of developments in blockchain and art. The company engages across the entire value chain - artists (and their art schools), dealer-intermediaries, and buyer-collectors. What makes ATO special is the same thing that turned some of those 2016 FINTECTs into unicorns; the effort and attention needed to change the industry from within.
Where does this confidence come from? In 2018, ATO Gallery facilitated the world record sale for the most expensive physical artwork ever purchased with Bitcoin. “As we launch the ATO Platform, high- stakes, high-value collectors will continue to turn to us to securely track transactions and their art asset value appreciation,” noted Eldridge.
So what do you get when you put a wealth manager, a technologist, artists, an angel investor, art dealers, and art industry insiders into the same venture? Well, just watch the art industry headlines and you will certainly see.
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About ATO Platform
ATO is the new standard for artists, collectors, and galleries. ATO protects against the emergence of a counterfeit market and tracks historical information to ensure artists receive royalties from their resales.