New investors and board members include the modern and contemporary art dealer David Zwirner.
The firm (whose first investors included Damien Hirst and White Cube Gallery founder Jay Jopling) say they will use the capital to expand in the US and Europe.
Particular focus will be placed on expanding its technical team (including making the site friendlier to mobile devices), as well as bringing in specialists to broaden the scope of the business beyond the selling of 20th and 21st century art.
Alongside auctions of design, Paddle8 have recently held sales of vintage men's and women's accessories, music and film memorabilia and other collectables.
