A new startup has recently emerged in the midst of a depressed crypto market, aiming to revolutionize the art world by offering fractional ownership of blue-chip art through NFT technology.

The launch of Freeport took place at Zero Bond, a New York club, amidst an ambiance of old-fashioned cocktails, Korean barbecue hors d’oeuvre, and opulent drapery. The event showcased an Andy Warhol Marilyn print in a vibrant hot-pink colorway, propped up on an easel. Alongside this iconic piece, three other Warhol prints were made available to the initial round of Freeport investors, enabling them to purchase fractional shares for as low as $25 per share, with a minimum buy-in of 10 shares (Marilyn priced at $55 per share).

The concept may sound somewhat familiar, as Masterworks, established in 2017, was among the first to introduce the idea of selling “shares” of blue-chip artworks, albeit with a significantly higher minimum investment of $15,000. In December 2021, former Christie’s rainmaker Philip Gouzer founded Particle, offering shares of artworks facilitated by blockchain technology, essentially providing buyers with an NFT representing their share and allowing them to sell on secondary NFT marketplaces such as OpenSea or Rarible. However, both companies have faced challenges, with Masterworks drawing scrutiny for potential regulatory violations according to an ARTnews investigation, and Particle’s NFTs selling for less than their original price, leaving plans for further acquisitions and a decentralized museum in a state of uncertainty.

Nonetheless, Freeport’s investors and founders remain optimistic. The company represents a blend of Masterworks and Particle. Similar to Masterworks, Freeport has obtained Securities and Exchange Commission approval to sell Regulation A securities, which is advantageous given increasing regulatory scrutiny on novel asset trading. However, like Particle, Freeport leverages blockchain technology, allowing them to tap into a collecting community that has shown openness to new forms of collecting. It appears to be the best of both worlds.

Colin Johnson, co-founder and CEO of Freeport, expresses confidence in the company’s legitimacy and solid backing, stating, “We did the SEC thing, we went legit. We’re not that exposed. We’re not like FTX coin. We’re backed by something very solid that has value.” He further highlights that many individuals are familiar with fine art but may not personally know artists, and if they were to recognize anyone, it would likely be Andy Warhol.

Fortunately, Johnson and his team had connections in the right places. Through a family friend, Michael Haber, who has been an avid collector of Warhol’s work, Johnson’s family was encouraged to invest in it, from his grandmother to his brother. It was Haber who initially inspired Johnson to explore the possibilities of Web3 technology while Johnson was working at Apple in Partner Marketing.

When Johnson decided to pursue Freeport, Haber introduced him to Jane Holzer, also known as Baby Jane Holzer from Factory fame, whose status as a New York “It” Girl was recently celebrated in New York magazine. Holzer possesses her own collection of Warhols and agreed, alongside Haber, to sell some of it to Johnson while providing valuable advice. Ultimately, Freeport acquired four Warhol prints—Double Mickey (1981), Marilyn (1967), Rebel without a Cause (1985), and Mick Jagger (1967)—for a little over $1.7 million.

Holzer expressed her initial enthusiasm for the concept, stating, “I love investing in things, and I thought it was kind of bizarre.” Seated next to Johnson during the interview, her fluttering fake eyelashes and voluminous swoop of blonde hair added to her charismatic presence.

By Impact Lab