Online Auction House Paddle8 Filed for Bankruptcy, Owing Justin Bieber and Jay-Z Over US$130,000 In Total

Paddle8, founded in 2011 by three young entrepreneurs, is an online auction house that targets Post-War and Contemporary art, street art and collectibles. Over the 9 years since its establishment, Paddle8 has become the centre of attention multiple times. Other than getting fundings from prominent figures like David Zwirner, Jay Jopling and Damien Hirst, the auction house also successfully invited a member of the Royal family to join their team. It has also presented benefit auctions online for renowned museums such as Solomon R. Guggenheim Museum and Los Angeles County Museum of Art. However, the auction house has recently filed for bankruptcy as reported by the media. 

Two of Paddle8’s founders Alexander Gilkes (right) and Aditya Julka (left)

Paddle8 held a charity auction for Justin Bieber very recently (second from the right)

According to Artnet, Paddle8 filed for Chapter 11 bankruptcy protection in New York. Amongst the creditors listed in their bankruptcy petition are pop star Justin Bieber and Jay-Z’s Shawn Carter Foundation which the company owes US$73,000 and US$65,000 to respectively. The debts are related to the charity auctions which Paddle8 held previously for them. 

Paddle8’s most heard-of co-founder out of the three is perhaps Alexander Gilkes. Born and raised in London, Gilkes worked as an executive at LVMH and an auctioneer at Phillips. In 2011, he founded Paddle8 with his two partners. 

Paddle8 was initially created as an online platform for exhibiting contemporary art and later turned into an online auction house. It targets pieces which are priced between US$1000 and $100,000, including Post-War and Contemporary art, prints & multiples, photography, street art and collectibles.

Gilkes quickly became the man of the hour because of the success of Paddle8. He was named as one of Fast Company's ‘Most Creative Entrepreneurs’, the ‘100 Most Powerful People in the Art World’ and one of the ‘40 Most Important People Under 40’. He was also invited to serve on the board of the New York Academy of Art. 

Alexander Gilkes has become man of the hour of the art industry |photo credit: Alexander Gilkes instagram

Paddle8’s official website

Gilkes soon became a celebrity and was featured on Vogue as well as online luxury boutique MR PORTER. He was also on Vanity Fair and GQ’s best dressed list. 

Gilkes was educated at Eton College, one of the top colleges in England. During his time at Eton, he became friends with members of the Royal Family, including Prince Harry. Gilkes’ ex-wife was one of the people who had introduced Prince Harry to Meghan Markle. And because of Gilkes’ close relationship with the Royals, he successfully got Princess Eugenie to work for Paddle 8. 

Apart from his close relationship with the Royals, Gilkes has also built friendships with many celebrities including best actor Eddie Redmayne, rapper Jay-Z, Victoria Beckham...the list goes on and on. Gilkes served as an auctioneer for Madonna and Elton John’s benefit auctions as well. For the past few years, he has also appeared on entertainment pages of many tabloids and magazines due to his romantic relationship with Russian tennis player Maria Sharapova. 

Alexander Gilkes (right) was the auctioneer of Elton John’s benefit auction|photo credit: Alexander Gilkes instagram

Alexander Gilkes and Maria Sharapova are in a relationship|photo credit: Alexander Gilkes instagram

Under Gilkes’ leadership, Paddle8 expanded its business rapidly. The auction house partnered with over 300 non-profit organisations, such as the Guggenheim, the Los Angeles County Museum of Art and the Brooklyn Academy of Music to hold charity auctions. In 2015, Paddle8 has gained over 100,000 registered clients and has sold around US$70m worth of art. Its annual income was estimated at US$20m. 

Paddle8’s success attracted many famed investors including David Zwirner (founder of David Zwirner Art Gallery), Jay Jopling (founder of White Cube), Damien Hirst (British contemporary artist), Vladimir Yevtushenkov (major owner of Sistema), Edgar Berger (CEO of Sony Music Entertainment) and Mousse Partners (investment firm in the U.S.). 

Starting from 2016, Paddle8 has announced multiple mergers and acquisitions. Their proactive way of doing business has gained the trust of a number of celebrities like Justin Bieber and Jay-Z who held charity sales through the company. Paddle8 also began to use blockchain technology and collaborated with Highsnobiety in promoting street art and holding street fashion sales. 

Paddle8 collaborated with Highsnobiety to promote street art

Paddle8 filed for bankruptcy

Despite Paddle8’s success, the business started to show signs of failure recently. Around a week ago, the nonprofit New American Cinema Group (NACG) filed a lawsuit against Paddle8 on a charity sale which the auction house organised for them towards the end of 2019. On one hand, NACG failed to receive funds from Paddle8. On the other hand, clients did not receive the works that they bid for. 

Paddle8 filed for bankruptcy a week after responding to NACG’s lawsuit against them by saying that they aim ‘to resolve all of these situations quickly and amicably’. We will keep you updated with the latest information on this incident.