As investors look to diversify their holding amid exceptionally top-heavy traditional asset markets, more tech-enabled platforms are popping up to make the case for their alternative investment platform of choice.
Masterworks, a startup that sells fractionalized shares of paintings and other works by famous artists, has achieved a unicorn valuation as it looks to corner the market on bringing fine art exposure into people’s portfolios.
Masterworks buys and stores a number of paintings by famed contemporary artists like Andy Warhol, Keith Haring, Jean-Michel Basquiat and Yayoi Kusama, selling shares in qualified public offerings that are registered with the SEC, allowing investors to trade those shares on its secondary market once an offering closes.
Shareholders get paid out when Masterworks eventually sells a painting. The startup makes money by selling those paintings at a profit, earning 20% of the profit each time a painting sells alongside a 1.5% per year management fee on each piece of artwork. The startup is still chasing after investors with a fair amount of capital to invest, with Lynn noting that their average investor puts more than $5,000 into each painting they back, investing around $30,000 over their lifetime.