Financial basis

Christie’s becomes a venture capitalist with a new technology-focused fund

A truck parked outside Christie’s at Rockefeller Center in New York last year displays a CryptoPunk on electronic billboards. The auction house sold nine of Larva Labs’ CryptoPunks during its 21st Century Evening Sale in May 2021.

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Christie’s announced on Monday that it is now investing in cutting-edge technology linked to the future of the art market through an internal strategic venture capital fund.

Christie’s Venture will focus on seed funding for companies developing Web 3.0 and related technologies, innovations that facilitate the consumption of art, including digital art, and financial technologies that facilitate the purchase and art sale.

“We’re especially interested in founders who are doing things that reduce friction in our space, whether it’s buying and selling, provenance, security, or technologies that help people better consume the art,” said Devang Thakkar, global head of Christie’s Ventures. “These are the kinds of areas that we have identified where we can help move the needle.”

Thakkar began advising Christie’s CEO Guillame Cerutti and the management team during the pandemic on a range of digital considerations, including web and mobile applications, trends in non-fungible tokens, or NFTs, and ownership. digital.

“With the growth of this field over the last year, we had a front row seat to the development and innovation that the founders were bringing to us,” he says. At the time, Christie’s had no way to participate in these fledgling ventures, so Thakkar floated the idea of ​​a venture capital fund.

The vehicle’s first investment is in LayerZero Labs, which Christie’s describes as a “cross-chain interoperability company.” In other words, LayerZero is developing technology that will allow people to move assets between blockchains such as Ethereum, Solana, and Algorand.

There are currently over 1,000 blockchains and Christie’s expects industry consolidation to reduce the number to 20-30 over the next year and a half. LayerZero should make it easier for individuals to move their holdings without going through multiple steps and paying lots of fees. It’s a technology that should benefit any crypto holder, not just those with NFT-based art, Thakkar says.

In addition to these Web 3.0 technologies, Christie’s will also invest in technologies that make it easier to consume art, whether through today’s computer systems, advanced displays or something else, he says, adding: “C This is an area of ​​investigation for us.

When it comes to financial innovation, Christie’s, which has its own art financing division, is looking beyond traditional art lending to selling fractional shares in fine art and other innovations. that facilitate the sale of art.

The fund is launched at a time when cryptocurrencies have fallen sharply, also reducing the value of many NFTs. Ethereum, which is the basis of many NFTs, is down nearly 66% through Friday.

But Thakkar says this “crypto winter” actually makes it “a bit more realistic to invest in this space – the fog of speculation and high prices have eased a bit.” He cites Andreessen Horowitz, a US$33 billion California venture capital firm that began investing in cutting-edge technology in 2009, amid the financial crisis.

Christie’s Ventures is spun off from the auction house’s balance sheet and will not include other investors. Legal and financial due diligence will also be handled internally.

Thakkar, who has been investing in companies on his own for 10 years, worked at Microsoft for a decade and was a former executive at Artsy, and he says he too grew up around art. This new role at Christie’s is “a perfect blend of every tissue of my being,” he says.