What inspired you to found ARTERNAL?
Empathy. After being inspired by my friend quitting her job to be a full-time artist, I put on my entrepreneurial hat to explore building a business within the art world to help her goals as an artist. To get started, I met with dozens of artists and eventually built a platform ultimately named MyCityMuse. After we struggled to drive revenue from artists at such an early stage in their careers, I pivoted to focus on art collectors and enthusiasts. This platform manifested itself as ARTLOCAL, a Yelp for art galleries.
We attempted to monetize this platform, which was essentially a glorified art gallery guide with 10K users, by selling it into art galleries as a way to drive traffic. Most galleries told us, “We just care about the art sale, not foot traffic.” As I came to realize how important relationships are in art sales, I saw an opportunity to equip galleries with the best CRM tools, which was the first “aha” moment for ARTERNAL today. We built the first CRM tool through the New Museum’s startup incubator (NEW INC) in New York as part of their inaugural cohort, and iterated on the initial software to support small dealers.
What does the typical ARTERNAL customer look like?
We work with galleries, art advisory firms, and private sales specialists within the auction houses. They have sales assistants, directors, and other staff that leverage our platform for the day-to-day needs of running an art business and we want to equip businesses with the best back office tools to run their daily operations across desktop and mobile devices. Since launching, we’ve expanded from small dealers to support larger businesses like KARMA, David Kordansky, Hauser & Wirth, Phillips Auction House, and Prizm Art Fair.
What differentiates ARTERNAL from other CRM options?
ARTERNAL provides workflows specific to the art industry rather than off-the-shelf tools you’d find in larger CRM platforms. Art is incredibly visual, and we wanted our tools, like Inventory Management, which automates workflows, creates virtual viewing rooms, and generates reports, to reflect the medium.
You coined the term ArtTech in 2021. How has it evolved over the last two years?
We initially coined ArtTech as a way to foster an understanding that technology can assist your workflow. The art market, as a whole, can be slow to adopt new digital tools, so we wanted to highlight the importance of technology during the pandemic, when galleries were struggling. These conversations evolved from how tech can generally help your business to the application of data to understand and improve your operations and most importantly, sales.
With ArtTech, dealers can more effectively communicate with clients at scale, and better track and organize conversations. Sales become simpler, as buyers can view and utilize online viewing rooms to see available inventory and purchase a piece. It has also created better ways of working, moving from pen and paper and Excel spreadsheets to workflows within our CRM, inventory management, invoicing, mobile app, and other tools.
With ArtTech, dealers can more effectively communicate with clients at scale, and better track and organize conversations.
How is ARTERNAL becoming the first SaaS embedded fintech solution in the art world?
Payments is becoming a consistent conversation as we meet with prospective and existing clients. We wanted to be on the forefront of this technology to help people streamline their business operations and conduct everything under one platform. We were inspired by neobanks, which allow you to conduct a wire transfer without the need to visit a bank.
With Stripe, we can now offer our clients an embedded financing tool, in which buyers can pay for a particular artwork over time, with invoicing optionality to improve sales within our own product. The art world transacts on trust, and our partnership with Stripe adds another layer of trust.
How do you see BNPL services integrating with ARTERNAL’s solutions?
When it comes to the art world, BNPL helps in a number of ways. First, cash flow issues do present themselves from time to time within galleries, and BNPL provides a way to get the full payment upfront while the buyer or acquirer pays over time. Second, the gallery is not a revolving credit facility as they don’t possess a credit rating system, yet find themselves extending payment options to those they truly don’t know will actually fulfill the payment over time. Third, tracking payments across a multitude of clients is inefficient and can lead to lost revenue if you lack the time to reconcile accounts owing. BNPL simplifies this entirely and, embedded in our vertical software, provides easy access as a collector to make payments over time. For art dealers, this allows optionality to their client base, whatever their needs may be. BNPL provides a more seamless experience than payment plans.
For buyers, BNPL removes a particular barrier to entry for the art market. Many seasoned mega collectors started with a payment plan, and most aren’t aware of that. A wider range of people can now purchase art, paying in installments rather than needing to have cash on hand. This helps immensely from a diverse buyer perspective, bringing in new entrants who want to participate but were previously left out. From the perspective of an experienced collector, the optionality of BNPL enables them to put cash to work toward their other assets instead of having funds locked up in a single real-time purchase.
Where do you see your partnership with Stripe evolving in the future?
The future of the art market is peer to peer, and we’re seeing a crescendo in private sales. Stripe has a lot of financial products under the hood that allow ARTERNAL to be more innovative. We plan to leverage Stripe’s tools and really dig into the opportunities that are there to enable this peer-to-peer activity, whether through ACH or bank wire transfers, that allow our customers to seamlessly build a digital and financial future. Stripe is a partner who can help make that happen.
Where are Stripe and ARTERNAL uniquely aligned in terms of shared values?
We both care about access and commerce. As a Black founder, I want other entrepreneurs and business owners to have access to the latest and greatest technologies. With Stripe Atlas, founders have the ability to spin up their business quickly through legal and financial tools. That care for business, particularly small business, is something we both care deeply about.
From the perspective of an experienced collector, the optionality of BNPL enables them to put cash to work toward their other assets instead of having funds locked up in a single real-time purchase.