Benjamin Genocchio, Wednesday, February 11, 2015
artnet News Exclusive:
Christie’s has bought Collectrium, an online collection management tool for the art world. Sources close to the deal say the purchase price was $16 million, although this figure could not be confirmed at the time of publication as neither Christie’s nor Collectrium returned calls. Other former staff members say the sale figure was between $20 and $25 million but that cannot be confirmed. Equity documents for former staffers being paid out list $16 million.
Founded in 2010 by Boris Pevzner, Collectrium offers digital collection management to art collectors, dealers, galleries, and art advisers.
Mr. Pevzner had the idea in 2009 and first discussed it with Sotheby’s and academics in London. Among the services and guarantees offered on its site, Collectrium promises “ironclad security,” cutting edge technology in the form of data retrieval on scanned artwork (this means instant image recognition of millions of artworks), expert valuations and other art management features. Subscription plans start at $45 per month and rates vary according to the number of users or logins, training sessions, and personalized client service.
Mr. Pevzner has been a steady presence at art fairs over the past 4 years, talking up his product and quietly raising money. Dedication, focus, and a tight reign on the expenses were a big part of his success, said current and former employees who spoke to artnet News on condition of anonymity. “For years a lot of staff worked for free or on very low wages,” said one former employee. “The upside was we got equity which is now an amazing bonanza for us.”
Christie’s have tried for several years to find a tech solution for inventory management. Some insiders at Christie’s say they spent as much as $100 million trying to develop the technology. The Collectrium purchase took almost a year to finalize with initial meetings in London with Christie’s former CEO Steven P. Murphy and the CTO Ken Citron and continued in New York. Not everyone in Christie’s was in favor of the acquisition though the sale gives them an instant solution to the inventory management problem. Christie’s has seen its fair share of management turnover and shake-ups in the past year (See: Why Was Christie’s CEO Steven Murphy Fired?).
Christie’s staff who spoke to artnet News on condition of anonymity said that the purchase price included paying off an undisclosed amount of debt, which Collectrium was carrying.
Collectrium is more than just an inventory management system, although those familiar with the company and its products say that it is the core product, the inventory management system and work on image recognition technology, which works best and is the only thing that has real value. Other bells and whistles like the iPhone app, which users say was a bit of a disaster due to low adoption rates and some technical issues, were added more recently to make the product more attractive to investors.
Roxanna Zarnegar, former COO of Christie’s Americas and currently SVP of artnet Auctions & Private Sales (see Art Now: Exceptional Works by Market Luminaries), commented: “The collection management tool works and is a highly sophisticated product. It offers a solution, using cloud technology, to inventory, manage and even sell artwork. Bottom line is it is a great way of capturing and storing data and can be applied across all elements of art sales.”
The Collectrium sale comes as other online art start-ups struggle for revenue and viable business models. Artsy continues to burn through investor venture capital money in search of a business model, without showing operating profits or having any immediate application as an online sale platform (their latest venture is to copy artnet’s Gallery Network in which galleries pay to load inventory, though they currently have less than half of the total number of galleries on the Gallery Network and it is not clear how many of the Artsy galleries are even paying for their membership). Meanwhile, the New York art world is filled with rumors that Paddle 8 is for sale. Interesting times.