— Scott Reyburn (@ScottReyburn1) January 27, 2018
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Last week's announcement that online art auctioneer, Paddle 8, was taking an investment from a Swiss blockchain company set off a series of hot takes in the Financial Times and the New York Times about the future of the art market "online."
The first takes rightly focused on how Paddle 8 was on the rebound from a failed marriage to Auctionata that nearly took down the company. So it was hardly a surprise that the concern would take nearly $9m in fresh capital in exchange for 15% of the company with an additional 36% pre-negotiated at price that could give the Swiss control of Paddle 8 for slightly more than $35m.
As deals go, that's pretty good exit for Paddle 8's investors, presuming they can get their hands on the $35m that their minority stake will putatively be worth. It's unlikely that any of the $9m going into the company now will cash out shareholders given the auction house's need for capital to sustain and grow its business.
There are two different aspects of the story that are worth following through on. The first is figuring out who is behind the new investment. The second is to ask whether the assumption expressed above on Twitter by The New York Times's Scott Reyburn—"the last business yet to be transformed by digital technology"—is at all an accurate description of the state of play.
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