Middle market global auction start up, Auctionata-Paddle8, with $132m in capital previously raised between both firms, has announced the installation of “professional” management with a new CEO and CFO coming from Bertelsmann and Procter & Gamble in Switzerland.
Auctionata | Paddle8, the online auction platform for art and luxury goods, based in New York and Berlin, has expanded its leadership team. Thomas Hesse, 49, has been named new Chief Executive Officer (CEO), to lead the German-American high-growth company. Auctionata | Paddle8 also appointed Lucas Hülsmann, 45, an experienced finance professional, as Chief Financial Officer (CFO).
Hesse has more than 20 years of experience in the leadership, development and digital transformation of companies in the television and media industry.[…] In his new role at Auctionata | Paddle8, he will lead the integration of the merged company, and its evolution from online auction house to curated live video network and global marketplace for art and luxury goods.
“Three years after the launch of the livestream auction, Auctionata | Paddle8 is one of the most promising and innovative companies at the highly dynamic intersection of ecommerce, media, art and luxury goods,” says Hesse.
The reason this move is interesting and important is two-fold. Paddle-ata, which will surely be rechristened as the two firms are merged going forward, has needed pedigreed management and financial controls that will inspire confidence for some time. Although the announcement gives a role to former CEO Alexander Zacke, Zacke’s past behavior has been significant constraint on the firm’s future.
Interestingly, none of the Paddle8 founders or principals are mentioned in the press release.
The second reason the new management team is important lies in the fact that Hesse comes from a media company. Although he is a business development executive with little operational experience to point to, much of Auctionata-Paddle8’s promise lies in its hybrid live auction model where sales are conducted live on global webcast.
That may sound like a third-tier auction option along the lines of high-pressure low-value cable home shopping networks; however, Invaluable has been knitting together a network of regional auction sales that would help Auctionata-Paddle8 define the category.
More to the point, in an earnings conference call last month, Sotheby’s CEO Tad Smith planted a flag by telling stock analysts that a long-term thesis for Sotheby’s as an investment lay in its developing a similar model at the higher end. As far-fetched as that may seem for Sotheby’s, Smith may have inadvertently validated Auctionata-Paddle 8’s business model.
With media-pedigreed management that exceeds Smith’s own experience, Auctionata-Paddle 8 has to be viewed in a different light for the near term.