Unlike many sectors, the Art+Tech market thrived under pandemic conditions. During COVID, art-focused startups raised nearly 60% of the industry’s total investment over the last two decades. What kinds of new opportunities can investors expect in the years to come?
COVID-19 fast-forwarded the adoption of technology in many traditional markets, and art is no exception. According to Fuelarts, an accelerator fostering innovation in the art industry, Art+Tech startups have raised $380 million since the beginning of 2020 alone. In comparison, over the last 20 years before the pandemic, art-fueled tech companies received $640 million.
In the first six months of the pandemic, art sellers and collectors were pushed into digital space. “Fairs went online, galleries mastered VR, and auction houses offered mixed bids combining art and luxury goods,” said Denis Belkevich, founder at Fuelarts. As a result, the demand for innovation in the art market flourished, attracting startups and venture capital.
New payment systems, Big Data, and instruments to help create, manage, and sell NFTs are just a few options for investors looking to take advantage of the Art+Tech boom. Here are some of the market’s most promising growth areas:
Multi-Gallery Platforms
Digital marketplaces, such as New York City-based online brokerage Artsy, are well-positioned for growth. These platforms attract online shoppers with a continuous change of offers, as well as a dynamic, informative way to represent art. Collectors also prefer marketplaces to the static online auctions offered by most galleries. Marketplaces have benefited most from the NFT hype: Sales of digital collectibles surged to $10.7 billion in Q3, up from $1.3 billion in Q2.
Visualization
Until 2020, VR and AR projects in the art industry often lacked a clear business strategy, since they were primarily favored by non-profit institutions, museums, or foundations. COVID-19 fast-tracked the creation of new tools, such as All World, a platform allowing artists to upload and sell their work via AR.
Gamify
Starting with the gamification of NFTs in museum collections as a way to attract Gen Z, Gamify is a powerful new trend to explore. During the pandemic, gamers have been transitioning into artistic spaces, importing their tastes, preferences, and budgets into those spaces as well. According to Fuelarts, this trend looks likely to continue in the future.
Art Analytics
Technology for predicting artists’ future sales without auction history is evolving. Collectors can now receive insights based on large amounts of data. In 2020, the Phillips auction house announced an exclusive partnership with Articker, a new market-tracking tool analyzing artist trends that can affect how artworks are appraised. Identifying the correlation between NFT prices and the physical art world would be the next step for these tracking tools.
Risk Management
In 2021, new financial instruments for the art industry emerged, including auction guarantees, resale of liabilities, and various art derivatives. These tools are in demand among experienced investors. The booming digital collectibles market is also in desperate need of risk assessment tools. In the future, according to Fuelarts, investors can expect more transparency and regulation for NFTs, as well as more opportunities for Art + Fintech.
By Victoria Zavyalova, co-founder, V Startup Agency
Published on Yahoo.Finance
