In a baseball cap and jeans, Brian Donnelly has the chilled-out vibe of a seasoned skater as he leans forward, elbows on knees, and shrugs.

“Honestly, I wish the headlines were about the work,” says the 44-year-old artist. “There’s money out there, and people can spend it how they wish. It doesn’t make the work better or worse.”

Donnelly, better known as Kaws, is sitting in the office above his Brooklyn studio, surrounded by the collectible characters that have made him a pop culture phenomenon.

If you haven’t heard of him, you have probably seen his work: with 2.4 million fans on Instagram, a huge following in Asia, a coveted line of vinyl toys, and collaborations with brands as varied as Dior, Nike, Sesame Street and Uniqlo, Kaws has become one of the most popular living artists in the world. But that also makes him one of the most contentious.

The headlines he refers to happened only recently: in March this year, his 2005 painting the Kaws Album was sold for a shocking $14.8m.

The Kaws Album (2005) sold for $14.8m at auction in March. Photograph: Kaws

It was a secondary market sale, which Donnelly had no control over, didn’t profit from, and is clearly sick of talking about. Just a week earlier, he had launched one of his most ambitious sculptures on Hong Kong’s Victoria Harbour: a 30-metre inflatable Companion – one of the iconic characters of the Kaws kingdom – which dwarfed the boats around it as it floated past the city skyline.

The project had left him “on a high”, he said – but then the sale at Sotheby’s happened, “and immediately every headline shifted to the money”.

The painting itself is one sq metre, based on the Yellow Album: the Simpsons’ appropriation of the album cover for the Beatles’ Sgt Pepper’s. On top of the faces of the cartoon characters, Donnelly had painted Kaws’ signature ears and crossed-out eyes.

The sale price smashed the auction house’s estimates 15 times over. As one critic noted, the piece was worth $2m more than Propped by Jenny Saville, which had made her the most expensive living female artist ever when it went under the hammer a few months earlier. Hers was a groundbreaking commentary on feminism and the male gaze; his was a riff on a riff, and seemed more like a cheeky joke.

Suddenly, critics were assessing the conceptual value of the art, and the artist was drawn into a conversation he’d rather not be having. “Do I think my work should sell for this much? No,” Donnelly posted flatly on Instagram that day. “Did I arrive at my studio this morning the same time I always do? Yes.”

Donnelly poses amid his private collection – and his own creations. Photograph: Angus Mordant/The Guardian

The Kaws hype – and backlash – didn’t come out of nowhere. Justin Bieber, Pharrell Williams, DJ Khaled and Larry Warsh are among his collectors, and in the years leading up to the sale, his toys were being snapped up in frenzies and copied by fakes, and his Uniqlo collaborations were bringing all-out brawls to stores.

ArtNet reported that “all 20 of Kaws’s highest auction prices were set in 2018”, but quoted art adviser Josh Baer, who dismissed the craze as a bubble: “If you think that Paris Hilton and the Kardashians are important cultural figures, then you’re likely to think Kaws is an important artist.”

But art institutions are now paying attention. Kaws: Companionship in the Age of Loneliness opened on Thursday at the National Gallery of Victoria in Melbourne: the largest retrospective of Kaws’ 25-year career to date. Another exhibition, Blackout, opens in London in October; and in 2021, the Brooklyn Museum will host its own major survey.

The Melbourne show features more than 100 works including Donnelly’s early sketches, tags and street art; sneaker collaborations; toys; abstract paintings; and large-scale sculptures. The gift shop has been over-run by collectors for the last two days, and the NGV commissioned its own work, too: the largest bronze Kaws piece ever, Gone stands at seven metres tall and weighs 14 tonnes.

Commissioned by the NGV, Gone is the artist’s largest ever bronze sculpture. Photograph: Asanka Ratnayake/Getty Images

Donnelly was just 12 when he started tagging around his New Jersey neighbourhood. In the early 90s, through skating, he found a community among the street artists of New York – mostly older men who mentored him, names like Futura, Zephyr and Lee Quinones.

After a degree in illustration, he was breaking into advertising cabinets throughout the city, taking Calvin Klein, Marlboro and Guess posters back home, painting over them and then returning them to the streets. It wasn’t political, or anticapitalist, he says. He doesn’t like to talk about motivations. “It was a proof of existence thing. I liked the [advertising] images. I painted over them because they were omnipresent.”

‘It was a proof of existence thing’: Early in his career, Kaws took ad posters from the New York streets, worked on them at home, and then returned them. Photograph: Tom Ross

The ad interventions are showcased at the NGV, as are the artist’s takes on cartoon characters, from Spongebob to Snoopy to the Simpsons – and including, of course, the Kaws Album. But most impressive are his more recent paintings: striking, vibrant and playful abstractions, with block colours so vivid and intense you want to reach into them. To get that effect takes anywhere between 30-60 layers of paint.

NGV contemporary art curator Simon Maidment believes Kaws’ work has been unfairly dismissed by some critics, who have varyingly described it as “conceptual bankruptcy” and “pointless promotional toy garbage”.

“I see Brian, through his work, as a great kind of humanist, who is engaging on quite an emotional level with people,” Maidment says. He feels “pathos”, “despair” and “consolation” in Kaws’ sculptures, which are categorised as Companions, Accomplices, Chums or BFFs. These are the heroes of the exhibition, and when they appear together they hold or carry one another. When Companions appear alone, they mostly appear despondent, dejected or mortified.

“The figures are often talked about as cartoon or fun or whatever … but I think he’s responding very clearly to the rise of loneliness in our society.”

Engaging on an emotional level with people... an installation view of the Kaws exhibition. Photograph: Tom Ross

Loneliness is a topical theme, and now a global concern, but the sculptures that best represent it make up only part of the show; the majority is dedicated to Kaws’ pop culture riffs and collectibles. When the New York Times spoke to Brooklyn Museum director Anne Pasternak about the artist’s 2021 survey, she admitted: “I didn’t see the appeal [of Kaws] initially,” explaining that art with too much mass appeal “makes the art world uncomfortable”.

Maidment is invigorated by these debates. “Are these significant works in the world or not? Yes, they are for some people, and no they’re not for others – but that’s the case for all art,” he says. “But there seems to be something in particular about Brian’s work – I think because it has attracted such extreme sale values – which has created a sense of hostility. People want each individual work to live up to a level of significance that they don’t feel is matched by that about of money.”

On the secondary market itself, he says: “I don’t think there’s a clear relationship between the cultural significance of a work and the monetary value ascribed to it. If there was, there would be a lot more women selling for a lot more money.”

Kaws: Holiday, an installation in Fujinomiya, Japan in July 2018. Photograph: Handout/AllRightsReserved via Getty Images

Kaws has now produced more than 130 varieties of toys, sold in limited – and unlimited – editions for fans and private collectors. Visiting Japan in the late 90s, he was inspired by the otaku subculture and its obsessions with characters and collectibles. Soon, he had fallen in with high profile Japanese streetwear designers, and in 2006, Kaws launched his own fashion label and shop, Original Fake, in Aoyama.

His commitment to merchandise and “product” may be a turn-off for the high art world, but being accessible, he says, is part of the point. “When you’re a kid, you look at galleries as these zones that are like, ‘stay out’ and ‘you’re not welcome’ or ‘you’re priced out’. Through product, you get to become familiar [with the art] in a very personal way, in your own home … It gives you confidence to go to see other works, to learn more.”

He calls activist Keith Haring a “pivotal influence” – another New York street artist who opened his own shop, the Pop Shop, selling work cheaply as a means of democratising it.

“Keith was like a bridge to me,” Donnelly says. “When I was younger, I wasn’t going to galleries, I wasn’t going to museums … There was a lot of ‘this is fine art’ or ‘this is not fine art’; ‘this is commercial’, ‘this is high art’. In my mind I thought, art’s purpose is to communicate and reach people. Whichever outlet that’s being done through is the right one.”

• Kaws: Companionship in the Age of Loneliness is open at the NGV, Melbourne until 13 April 2020; Kaws: Blackout opens at London’s Skarstedt gallery on 1 October; a major Kaws survey is planned for Brooklyn Museum in 2021. Guardian Australia travelled as a guest of the NGV