“Balloon Dog (Blue), 2005” by Jeff Koons sold for an undisclosed amount as part of a May Paddle8 auction.
(Photo courtesy of Paddle8)

When the hip-hop collective Wu-Tang Clan decided to produce just one copy of their album Once Upon A Time in Shaolin as a work of modern art, they chose the online auction house Paddle8 to handle the high-profile sale. They “understand the concept of the new form of art,” said Wu-Tang chief producer RZA of the four-year-old company, cofounded by a team including Aditya Julka and Osman Khan (both MBA 2009).

More important, though, may be Paddle8’s understanding of the new art collector, someone who looks a lot like Julka and Khan: new to collecting, with a budget north of eBay but south of Sotheby’s, and a comfort with technology.

This long overlooked middle market—pieces from about $1,000 to $100,000—has suddenly become a hotly contested space online. Fifteen-year-old Saffronart, cofounded by Dinesh Vazirani (MBA 1994), was one of the earliest entrants, creating both a market for Indian art and an early model for bringing offline auctions online—one that has been copied by many. Even the venerable Sotheby’s, now under the direction of new tech-minded CEO Tad Smith (MBA 1992), has staked its claim to the online middle market, announcing a partnership earlier this year with eBay to stream live auctions.

Amid these competitors Paddle8 has positioned itself as the digital native of the online art auction world, a mediated peer-to-peer marketplace. Think eBay, but with authenticated art and memorabilia ranging from the works of contemporary artist Jeff Koons (like the piece pictured above) to rock legend Kurt Cobain’s Visa card (final price: $31,000), curated by the likes of Vogue’s Grace Coddington and art provocateur Tracey Emin. This online-only model requires limited physical infrastructure, allowing Paddle8 to expedite sales and charge a commission of 8 to 15 percent, well below some auction houses’ 20 to 25 percent commissions.

For Julka, it’s the sharing economy by another name. “It is similar to how Uber and Airbnb have thought about unused assets,” he says. “Everybody has unused assets sitting in their homes—art they don’t really love. If we can create a marketplace where people feel comfortable selling that piece and then buying something they truly love, then we will have fulfilled our mission.”

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