A GLASGOW business has launched a £500,000 funding round to power its ambition of revolutionising the art world.

Art Retail Networks (ARN) has developed an app that its chief executive Jamie McCallum believes can overcome the low adoption of technology and e-commerce in the sector.

The app will be utilised at the Glasgow Contemporary Art Fair being held at the city’s Old Fruitmarket this week.

Mr McCallum said the latest round would help ARN develop its international business and accelerate growth while it has first mover advantage.

“This is a $60 billion retail market relatively untouched by technology and in there lies a pretty significant opportunity,” said Mr McCallum.

After recruiting a dozen clients since entering the marketplace in late 2015, the company’s ActivCanvas product made its international breakthrough in January when it was used at the Startup Art Fair in Los Angeles. The platform will also be utilised at a sister event in San Francisco this month.

ARN provides all customers with their own branded mobile app, to which information on art and artists is uploaded.

By using visual recognition technology, registered users in a gallery or art fair can point their camera phone at an artwork and the app will automatically provide details on its price, its background and on the artist – it even has a colour palette which offers alternative pieces.

Users can create shortlists, while at the back-end, the seller builds a buyer profile based on what a user is looking at – this provides information on the user’s budget, their tastes and their requirements.

“This notion of a gallery having a website and a customer buying something without meeting them is very unlikely,” said Mr McCallum. “There is a definite requirement for a hybrid approach that is more sensitive to this market.”

Mr McCallum founded ARN in 2014 with Zach Sorrells after identifying that there was no such viable online platform.

“I was interested as to why there was a low adoption of technology in the art industry,” he said. “You’re not selling a commodity here, you’re selling a one-off. The likelihood of the ideal customer being in the local area is very low, so you need something like the internet to break out of that.

“That’s the paradox I’ve targeted this business towards. Here is an industry that needs e-commerce more than any other, but it’s also an industry where that doesn’t work.”

In what Mr McCallum called “the bedroom years” of the business, before it moved to The Whisky Bond creative hub in Glasgow, ARN was supported by public sector lenders Developing Strathclyde and West of Scotland Loan Fund, with advisory support from the Business Gateway in Ayrshire and Scottish Enterprise.

ARN won the Fine Trade Guild Guild’s 2014 Art Industry Innovation Award for ActivCanvas, which helped close a £400,000 round of funding, led by ESM Investment Syndicate, and the Scottish Investment Bank.

A follow-on round of £100,000 in 2015 enabled ARN to deliver the first sales and eliminate the technical and market risks for future investors.

Mr McCallum said ARN had taken on twice as many customers as it had expected since then, having found its “sweet spot” in art fairs – which he described as “the industry’s answer to the internet not working for it”.

“We are now focused on art fairs as the first port of call for our sales effort,” he said, noting there was a cascading effect whereby art fair exhibitors use ActivCanvas, which exposes galleries to the app, which in turn exposes artists to it.

For the current funding round, the company has recruited Quest Corporate as a broker, and Mr McCallum said the business was at the pitch stage with interest noted from both Scottish and US investors.

The platform currently contains 9,500 artworks from 3,000 artists with a collective value of £19m, being looked at by 1,000 art buyers. In terms of revenues, as a software-as-a-service business, ARN takes a monthly subscription fee from customers, while it also receives commission on works that are sold.

Mr McCallum said he was looking to deliver a ten times return to new investors within three years.