Artifact Labs, a startup that specializes in tokenizing historical artifacts, recently raised $3.25 million in a funding round led by hedge fund manager Blue Pool Capital and participated in by web3 investment firm Animoca Ventures. Founded in 2020, Artifact spun out of Hong Kong newspaper South China Morning Post, which was acquired by Alibaba in 2015 for $262 million. Artifact’s first project involved non-fungible token (NFT) versions of SCMP’s front pages from 1997, the year of Hong Kong’s handover. Each item’s rarity level was determined by the significance of a certain day’s events. The success of this project, which sold for $260,000, showed the long-term potential of tokenizing historical artifacts and making them immutable and accessible to the public.
Artifact works with a handful of third-party partners to power its NFT transactions. Its 1997 collection was minted on Flow using Blocto wallets, but it’s also able to mint NFTs across other chains including Ethereum, Polygon and BSC. In addition, the company has received grants from Dapper Labs and Filecoin. Recently, it acquired the source code of Refinable, an NFT infrastructure provider, which would allow Artifact to develop a decentralized NFT marketplace. The company will also spend the seed funding on adding technical headcount.
Artifact is building a marketplace for museums and cultural institutions. While it admires OpenSea, it sees itself as a more niche player due to its focus on traditional institutions. In the nascent crypto industry where the fundamental pieces are still taking form, developers and projects are actively making improvements to the field. In the area of on-chain preservation work, Artifact outlined a new metadata standard in a proposal to Ethereum.
Artifact is geographically positioned to tap a potentially large pool of collectors. Hong Kong has long been the Asian hub for art dealing thanks to its favorable tax system. In 2020, the city overtook London as the second-largest art auction market behind New York. Artifact plans to work with other types of cultural institutions beyond its genesis of tokenizing newspapers. So far, it’s struck partnerships with RMS Titanic Inc, the company granted the rights to salvage the wrecked ocean liner; Hong Kong’s popular home-grown brand G.O.D.; and the Hong Kong Philharmonic Orchestra, which is jointly designing a metaverse-style virtual concert with Artifact.
The company is also in confidential talks with several major museums in Hong Kong and other parts of Asia to help create on-chain versions of their collections. Long-running multinationals are also its target clients. To date, Artifact has around 17,000 members in its Discord community. It monetizes by charging project fees from its institutional and IP partners and will explore a revenue-sharing model with its clients in future NFT sales.
The timing seems ripe for Artifact and other web3 businesses in Hong Kong. The city recently announced plans to legalize crypto retail trading over licensed exchanges, providing the necessary infrastructure for everyday consumers to buy and sell digital assets. The company has a team of around 16 staff mostly based out of Hong Kong. Its geographic expansion plan will follow the cultural centers of the world, with major museum hubs like New York, London and Paris being the likely next stops, said CEO Philip Pon.
Overall, Artifact Labs is a promising startup that’s leveraging blockchain technology to tokenize historical artifacts and make them accessible to the public. With its focus on traditional institutions and partnerships with major museums and cultural institutions, it has the potential to become a leading marketplace for on-chain preservation work. Its recent fundraising round, technical acquisitions and partnerships with third parties are proof of its commitment to innovation and growth in the crypto industry. The company’s geographic expansion plans will position it to capitalize on the growing demand for digital assets in major cultural centers around the world.