Hong Kong-based startup Artifact Labs, which was established by the South China Morning Post, has successfully raised $3.25 million to tokenize historical artifacts in its first external funding.
The funding, led by Blue Pool Capital and with participation from Animoca Ventures, will enable Artifact to develop its platform for converting historical artifacts into purchasable NFTs, making them immutable and accessible to the public.
NFTs have gained considerable attention recently, with total sales reaching $149 million and a more than 22 percent increase in buyers in the first week of May alone.
The previous success of Artifact’s NFT series commemorating Hong Kong’s handover from the U.K. to China could highlight the long-term potential of tokenizing historical artifacts. The collection featured NFT versions of SCMP’s front pages from 1997, the year of Hong Kong’s handover, with the rarity level determined by the significance of the events on each day.
Artifact was born from its parent company SCMP, one of Hong Kong’s top newspapers that Alibaba acquired for $262 million in 2015
The new startup aims to leverage its platform to provide a marketplace for museums and cultural institutions. Unlike OpenSea, another prominent NFT marketplace, Artifact focuses more on catering to traditional institutions.
“We are building a marketplace for museums and cultural institutions. Whilst we admire OpenSea, we are probably a bit more niche,” said Artifact CEO Philip Pon.
To facilitate its NFT transactions, Artifact collaborates with third-party partners and supports multiple blockchain networks, including Flow, Ethereum, Polygon and Binance Smart Chain.
The startup has also received grants from Dapper Labs and Filecoin, a decentralized storage solution. Additionally, Artifact recently acquired the source code of Refinable, an NFT infrastructure provider, to enhance its technical capabilities and develop a decentralized NFT marketplace.
Recognizing the importance of on-chain preservation, Artifact proposed a new metadata standard, EIP-6596, to Ethereum. James Ho, head of Animoca Ventures, commended Artifact for taking a leadership role in integrating blockchain technology and developing a standard that would benefit museums and custodians of culture.
Hong Kong as base of operation
As a strategic choice, Artifact plans to work with various cultural institutions beyond its initial focus on tokenizing newspapers. The startup has partnered with RMS Titanic Inc., GOD, a popular Hong Kong brand, and the Hong Kong Philharmonic Orchestra.
Furthermore, Artifact is engaged in confidential discussions with major museums in Hong Kong and other parts of Asia to tokenize their collections. With a thriving art market and a favorable tax system, Hong Kong is also an ideal base for Artifact.
The company plans to expand geographically, targeting major museum hubs such as New York, London, and Paris. Hong Kong’s recent announcement of plans to legalize crypto retail trading over licensed exchanges enhances the growth prospects for Artifact and other Web3 businesses.
Artifact’s monetization strategy involves charging its institutional and intellectual property partners project fees. Additionally, the startup aims to explore a revenue-sharing model with its clients for future NFT sales. With approximately 17,000 members in its Discord community, Artifact continues growing its network and fostering collaborations within the NFT ecosystem.
