Paddle8, Online Art Auctioneer, Is Merging With Swiss Tech Company


“This is a way for us to show we can better align with a new generation of collectors,” Alexander Gilkes, a founder of Paddle8, said in a telephone interview.

In 2016, Paddle8 merged with Auctionata in an effort to create a next-generation trans-Atlantic online auction house — but the marriage dissolved early last year when Auctionata filed for insolvency after serious questions about its business practices came to light.

“Last year was a horrible start to the year,” Mr. Gilkes said. Of the merger with Auctionata, he added, “There were very many salient reasons for doing it, but we didn’t see how the events would unfold.”

Sergey Skaterschikov, The Native’s chairman, said he saw the benefits of applying blockchain technology, essentially an online ledger of transactions, to the art world.

“A lot of the art trade is built on asymmetric information,” he said. “It was scaring a lot of potential buyers from the collectible market.”

The Native will buy a 15 percent stake in Paddle8 for 8.5 million Swiss francs, or $8.8 million. The Native will also have an option to buy an additional 36 percent of Paddle8 for 24.5 million Swiss francs, giving it a majority stake.

“The nature of the transaction actually solved for our reservations,” Osman Khan, another Paddle8 founder, said. “It really is a somewhat more cautious approach, after what we’d gone through.”

Cameron and Tyler Winklevoss, the investors who have long been proponents of Bitcoin and virtual currencies, have advised Paddle8 since 2015 and had pushed the company to adopt blockchain technology.

“We’ve long considered cryptocurrency as key to increasing transparency in markets around the world, including the art market,” Cameron Winklevoss said in a statement.

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