Digital art startups, call your deep-pocketed friends: the gauntlet has been thrown. Online art venue Paddle8 has secured $4 million from technology and luxury investors in its first significant round of venture fundraising. The investment is led by Mousse Partners, a private investment firm controlled by Chanel, Inc., and Founder Collective, a well-respected venture capital fund that has fueled startups like Makerbot and Milo.

Since it launched in May 2011, Paddle8’s traffic has increased to up to 100,000 views per day, and according to the company over 2,000 carefully screened individuals join its "private member" community every month. "With our combined expertise we were able to attract investors in luxury and technology," co-founder Alexander Gilkes told ARTINFO. "Over the next couple of months we'll roll out an ambitious pipeline of new developments, including a new app and increased editorial content." 

The seed money will keep Paddle8 competitive in a growing field of art e-commerce initiatives. It will launch a new user interface focused on connecting collectors with one another and improve its navigation, allowing collectors to browse more artwork from different eras and mediums. These moves may be a preemptive effort to ward off competition from Art.sy, the Dasha Zhukova and Larry Gagosian-backed art site that is positioning itself as a Pandora for the art world. (Art.sy has already launched in Beta and secured some impressive investors for itself, but it won’t launch fully until later this year.)

Other plans to simplify the transaction process for galleries, museums, and art fairs that sell wares through Paddle8 will keep it competitive with Artspace, a Web site that sells prints, photographs and sculpture, and is expanding to have an editorial component as well (to be helmed by ARTINFO's own former executive editor Andrew M. Goldstein). That start-up recently raised $2.5 million in investments. Paddle8's development of private viewing rooms, where galleries can show specific works to select clients, is also reminiscent of a similar program at the online-only VIP Art Fair, which ended its second edition today. 

Founded by former Phillips de Pury specialist Gilkes and McKinsey veteran Aditya Julka, Paddle8 has been among the most creative of this new crop of online art sales sites. Its core strategy is to produce guest-curated exhibitions online with works for sale at major galleries. To date, it claims that it works with over 200 galleries all over the world. Previous guest curators include artist Marina Abramovic, writer Glenn O’Brien, and actor Robin Williams (and his gallerist son Zak). Recently, it has also expanded to the world of art fairs, collaborating with events like NADA Miami and the Art Los Angeles Contemporary Fair to allow collectors to preview artwork leading up to the fair and purchase it online in the weeks that follow.