As tech startups go, Artsy.net has just the right blend of grunge and glamour. On four floors in Tribeca, rows of twentysomethings tap out news articles, steer art buyers to galleries, and set up auctions, all in silent servitude. But the floors are high up, and the river views are sweeping. Two of Artsy’s founders look appropriately scruffy in a small conference room. The third, in much-torn jeans, looks the part too, but she is fooling no one.
Wendi Murdoch, 49, the ex-wife of press lord Rupert Murdoch, is well enough set to have backed a bevy of tech companies, from Uber and Snapchat to Oscar and Warby Parker. Artsy, though, is her passion, and if there’s any truth to the company’s few public statements, she has picked a winner.
Founded as a partner for galleries selling art online, Artsy says its monthly sales have doubled in the past year. In just that time the company has also become a serious player in live auctions, working with all the major houses. In 2017 it held 190 of them—not fancy evening sales, but definitely day sales for Sotheby’s and Christie’s. Between the galleries and the auction houses, Artsy says it is now facilitating sales worth more than $20 million a month, all told. Meanwhile, its rivals are laying off staff.
The legend is that Carter Cleveland, tall and somewhat Uriah Heepish, invented Artsy in his Princeton dorm room when he was a computer science major. The son of an art historian, he missed seeing paintings on his walls, and he started imagining an art version of Amazon: a single website where every work of art in the world could be displayed—and bought and sold.
Sebastian Cwilich, formerly of Christie’s and the short-lived London gallery Haunch of Venison, brought art business savvy. Murdoch supplied seed money and strong opinions. She won’t say how much she invested, but when Artsy opened for business in 2012, it had $50 million in venture capital. Last summer, amid soaring numbers, it raised another $50 million. Artsy has other investors, but it’s Murdoch who sits with her two young partners, slow to make eye contact with a visitor but forceful when she does speak in her still strong Chinese accent.
Which of the three hatched the idea for Artsy is a bit murky. Cleveland has his Princeton story; Murdoch has her own version. “Dasha and I had an idea to do this,” she says with a bright smile, referring to Dasha Zhukova, the former wife of Russian oligarch Roman Abramovich. “Together we raised money… I talked to leading galleries, brought them in as our supporters. Dasha did creative design. Carter and Sebastian built the Artsy platform. We all worked as a team.” Cleveland is quick to admit that there would be no Artsy without Murdoch. She is quick to return the compliment.
One of Murdoch’s first calls was to Larry Gagosian—“He tried to sell me art!” The world’s most powerful dealer needed little convincing that the art market’s future lay online. Other gallerists—Marc Glimcher of Pace, the William Acquavella family, assorted Rockefellers—soon fell in. “It was clear there would be some platform that would allow people to have access to all art,” says Cwilich. “But this is the art world: It was all about ‘Who will I associate with? Who are the others on the platform?’”
For that, Murdoch was the perfect third leg of the stool: a world class connector, in business as well as romance. In 2010, Murdoch brought in Joshua Kushner of Thrive Capital, who wrote a check for $1.25 million. Kushner went on to lead Artsy’s $18.5 million series B round of funding.
If we talk about that, it will be the one line everyone reads.
Two years earlier Murdoch had reignited the courtship of Josh’s brother Jared with Ivanka Trump—history in the making. Asked about that match today, Murdoch demurs. “If we talk about that, it will be the one line everyone reads.”
(Those readers apparently include U.S. counterintelligence officials, who worry that Murdoch may have lobbied Jared and Ivanka for real estate projects on behalf of the Chinese government, in particular a $100 million Chinese garden at the National Arboretum, which called for a 70-foot tower that could conceivably have been used for surveillance of the White House and U.S. Capitol. A spokesman for Murdoch told the Wall Street Journal that she “has no knowledge of any garden projects funded by the Chinese government” and observes that she has not been accused of anything.)
Artsy has plenty of competition, but other startups have approached galleries in disruption mode: Work with us or else. Artsy let the galleries stay in charge—and so they remain. When an Artsy browser sees a painting he likes, Artsy passes him along to the gallery that has the work. The gallery, not Artsy, sets the price.
Five years after that strategic start, it has images of 800,000 artworks, 500,000 of which are for sale from more than 2,000 galleries around the world, which pay a monthly subscription fee. In a market where brick-and-mortar galleries are burdened by rising rents and pricey art fairs, sales wafting in from Artsy seem like so many check-laden Christmas cards.
At first glance Artsy’s auction side seems a much harder sell. Why not go to Sotheby’s, where you can see the art up close? “They said the same thing about dating,” Cleveland snorts. “‘How will it work when you can see the person only online?’ ” Case closed there. The appeal of Artsy to auction houses is clear: larger crowds, not just Old World catalog holders. For users, bidding is all but frictionless. “Once you register, we have your credit card information. You can bid at the next auction—don’t have to register all the info again,” Murdoch notes.
Not everyone goes to the site to buy. Many of the twentysomethings in the office are journalists turning out Artsy’s articles for a general audience—a great way to get the word out and stay atop Google. Museums are represented on Artsy too; it’s a research tool for curators and collectors alike. “If I want a Hockney,” Cleveland says, “I might want to see the Hockneys in major museums.”
There’s even a posse of professors—somewhere—working up an art genome for Artsy, rating traits by artist and artwork. One Picasso painting might be 100 percent on the Cubism scale; another might be 20 percent (his blue period, perhaps?). A classic Bonnard might be rated for redness, a figurative Philip Guston for pinkness. Almost any Warhol will rate 100 percent on the Pop Art scale, while a lesser Pop Artist—Tom Wesselmann, say—might rate 60 percent.
Now Artsy has gone further, spending a chunk of its capital on ArtAdvisor, a data science startup that uses artificial intelligence as a tool to value art. But the ultimate goal is to assess not just the art but the Artsy user. Amazon records our likes and dislikes; why not do the same for our artistic tastes? Every time a user clicks on an artist, a new bit of her genome is filled in. If you like de Kooning, you might be steered to a young artist in Bushwick who paints with similarly strong brushstrokes. “When Artsy sends me an alert about some cool art,” Murdoch says, “quite often I discover something I like.”
If this sounds a lot like Instagram, it should. Users on both sites browse art pages, and one page leads to another. Indeed, Cleveland says Instagram fits right into his master plan. “Our goal is for art to be as popular as music,” is something he’s fond of saying. Artsy has 600,000 followers on Instagram—a lot of cross-pollination—but Cleveland doesn’t think he’s losing many sales to Instagram artists who post their work and serve as their own dealers. A buyer has to give his credit card information every time he wants to buy a work on Instagram.
“Completing a seamless experience is not what Instagram is based on,”
Whether Artsy is profitable at this point—and whether Murdoch and other investors stand to make a killing or not—is another question.
Whether Artsy is profitable at this point—and whether Murdoch and other investors stand to make a killing or not—is another question. Though they have little but a black box to ponder, some analysts have set Artsy’s market cap as high as $275 million—a future windfall if the company keeps growing. Marion Maneker of the Art Market Monitor website, who talked to midlevel Artsy executives at the Basel Miami art fair in 2016, is more skeptical. They told him Artsy was “close to profitability,” which meant it had lost money in its first four years.
As with any tech startup, so much is perception, according to Artnet’s “Gray Market” columnist Tim Schneider, who cites Tesla as an example. The carmaker hasn’t made a profit either, yet its market cap is higher than GM’s. “Someday Artsy could be profitable, even wildly so,” Schneider says.
Asked what $100 in Artsy seed money would be worth today, Murdoch and Cleveland exchange knowing looks. “We can’t say,” Cleveland replies, “but you would have done very, very well.”
Murdoch is, not surprisingly, a serious collector. Like a lot of Chinese buyers, she started with Asian artists: Cai Guo-Qiang, Lee Ufan, Wang Guangle, Jia Aili, and Wang Yan Cheng. But in her Fifth Avenue living room, overlooking Central Park, there is an Agnes Martin above the mantel, and on another wall a Mark Grotjahn. Every day, she says, her art makes her happy—and so does Artsy. “You feel you help the art market to a broader universe.”
Cleveland, who gives talks on “art as an asset,” has his own take on why the art market is growing as fast as it is, and why Artsy is doing so well. “We are in an era when more and more of humanity is collectively ascending Maslow’s Hierarchy of Needs.” I don’t quite catch this, so I ask him to repeat it. Somehow, when he does, Maslow’s Hierarchy of Needs comes out as Mass of Higher Beads. Could he just clarify that one more time?
That’s when Murdoch turns to Cleveland and exclaims, in her Chinese accent, “Speak English!” And for a split second a really funny Wendi Murdoch appears before slipping back into her Artsy investor guise.