LONDON, 6 NOVEMBER 2024.- In a groundbreaking move set to transform the art investment landscape, Artscapy, a frontrunner in art technology innovation, unveiled its latest offering: a data-driven, art-secured lending solution. This pioneering service employs a proprietary ratings methodology, unlocking unprecedented liquidity opportunities for art collectors and investors alike. The launch signifies a pivotal shift in the perception and utilization of art as a tangible asset class, enabling collectors to access capital without relinquishing their prized collections.

“There is a new world emerging where art and finance converge,” stated Emilia De Stasio, CFA, COO and co-founder of Artscapy, who brings a wealth of experience from her previous roles at the European Central Bank and Moody’s Investors Service. “Art financing has transformed the way collectors engage with their collections. What was once considered an illiquid asset, locking up significant capital, can now be leveraged to unlock liquidity or acquire new works more efficiently. This shift adds another positive dimension to art's appeal as a passion investment."

Traditionally, the art world has been perceived as an exclusive domain, accessible primarily to ultra-wealthy individuals and institutions. However, rapid technological advancements are democratizing both art and finance, making art-backed financing accessible to a broader spectrum of collectors. Artscapy’s innovative approach allows art collections to serve as collateral, thereby unlocking liquidity and facilitating financial flexibility. This democratization is further supported by the increasing recognition of blue-chip art as a viable vehicle for wealth diversification. Enhanced data availability and sophisticated analytical methodologies are attracting a new wave of investors eager to participate in the art market.

One of the significant challenges in art financing has been the reluctance of major banks and institutional lenders to engage with the sector, primarily due to the specialized expertise required and the prevailing high-interest rate environment. Those institutions that do venture into art financing typically focus on high-value assets, such as multimillion-dollar pieces by masters like Picasso or Monet, leaving a substantial portion of the market underserved. Artscapy addresses this gap by offering specialized services tailored to the nuanced demands of the art market. The company’s portfolio includes a diverse range of blue-chip artworks, from iconic pieces by Damien Hirst and Andy Warhol to the contemporary street art of Banksy, catering to today’s diverse collector base.

Artscapy’s innovative art financing solutions are characterized by several key features that set them apart in the market:

Higher Loan-to-Value Ratios: Unlike traditional institutional lenders that typically offer loans with Loan-to-Value (LTV) ratios of 50% or lower, Artscapy provides up to 75% LTV on art-secured loans. This higher ratio offers collectors greater liquidity at more favorable terms, making art-backed financing a more attractive option.

Data-Driven Term Sheets: Leveraging a structured data and ratings methodology, Artscapy ensures that loan terms are fairer and more competitive, accurately reflecting current market conditions. This data-centric approach addresses a longstanding gap in the art financing sector, where previously, terms were often less transparent and less aligned with the true value of the assets.

Focus on the Mid-Market: Artscapy strategically targets the mid-market segment, which includes individual collectors and family offices. This segment accounts for approximately 90% of art-lending demand but has been largely overlooked by traditional lenders. By catering to this underserved market, Artscapy not only broadens its customer base but also democratizes access to art-backed financing, inviting more collectors to incorporate art into their financial portfolios.

“Contemporary art is gaining in popularity among younger, globally interconnected, and tech-savvy collectors and investors,” De Stasio added. “That means the art market also needs to catch up in terms of the benefits and flexibility that it can offer. By applying technology and an analytical framework to unstructured art market data, we are making this asset class more accessible and inviting for a wider audience.”

The global art-secured lending market, currently valued at approximately $30 billion, is projected to grow by 10% annually in the coming years. As collectors increasingly recognize the potential of their art collections as capital assets, the demand for art-secured loans is set to rise. Artscapy’s innovative approach, underpinned by its proprietary Art Rating System, provides collectors with new avenues to manage their art portfolios effectively. By unlocking capital from their collections, collectors can reinvest in new acquisitions, diversify their holdings, or meet other financial needs without the need to sell their valuable artworks.

Artscapy’s entry into the art financing space comes at a time when the intersection of art and finance is becoming more pronounced. The company’s data-driven methodology not only enhances the accuracy and reliability of art valuations but also instills greater confidence among investors and lenders. This increased transparency is crucial in a market that has traditionally been marked by opacity and limited accessibility.

Moreover, Artscapy’s solutions are poised to attract a new generation of art enthusiasts who view art not just as a passion investment but also as a strategic financial asset. The integration of advanced analytics and technology into art financing aligns with the evolving preferences of modern investors who seek both emotional and financial returns from their investments.

In conclusion, Artscapy is set to redefine the art investment landscape with its innovative, data-driven art-secured lending solutions. By bridging the gap between art and finance, the company is empowering a broader range of collectors to harness the financial potential of their art collections. This strategic move not only enhances liquidity within the art market but also elevates the role of art as a dynamic and versatile asset class in contemporary financial portfolios.

As the art-secured lending market continues to expand, Artscapy’s pioneering efforts are likely to inspire further innovation and collaboration within the industry, ultimately fostering a more inclusive and financially robust art ecosystem.