Backed by Jay-Z, Web3 Hardware Startup Spatial Labs raises $10 million

Web3 startup Spatial Labs has raised $10 million in its seed funding round, led by Blockchain Capital and backed by billionaire rap artist Jay-Z’s venture capital firm, Marcy Venture Partners. When combined with Spatial’s pre-seed funding increase of $4 million, the new round brings the startup’s total funding to $14 million.

Spatial Labs has developed a 13-millimeter microchip called lnq one chip, which can be sewn or embedded into physical fashion items. Each chip can be scanned with a smartphone via Near Field Communication (NFC) technology, revealing details about the item and creating a digital copy of it for metaverse portability. Each physical chip is linked to an NFT in Polygon with plenty of opportunities for brands to add custom details or content to the chip’s metadata.

Spatial Labs was started in 2019 by Iddris Sandu, a 25-year-old Ghanaian-American entrepreneur. In an interview with decipherSandu shared his vision for the hardware startup.

chip utility

Sandu has many ideas for his LNQ chip technology. For one thing, he wants buyers of physical items that contain the chip to be able to easily get a digital version of that exact item for use on metaverse platforms without having to buy the item twice.

“We believe that our approach is going to create a much more equitable situation metaverseSandu said. decipher. “If you look at the economies of scale, people can’t afford to buy things twice over and over again.”

He also discussed the potential for LNQ to provide authentication services for luxury brands, many of which already have metaverse plans, such as gucci, BalmainY Prada.

But Sandu also wants its customers to really think outside the box when it comes to what kind of data and content the chips can deliver.

“Our chip technology allows brands to embed loyalty programs directly into their products without people having to sign up for any of the services,” Sandu said.

“Now that unlocks a variety of different things, right? Because now you can think about having your products unlock tickets, specific interviews, podcasts, things like that,” he continued. “And so it is for many brands that want to find possible use cases for Web3 and the metaverse.

fast fashion removal

Time Ethereal now consume 99.998% less energy than before—and sidechain Polygon It’s also known for its low power consumption – Spatial Labs’ business cares about more than just blockchain sustainability. Because their product aims to create a bridge between the physical and digital fashion worlds, Spatial also wants to make the physical fashion industry more sustainable. “Fast fashion” has been well documented What wasteful Y untenable.

Sandu said decipher that the only way to ultimately solve the problem of fashion sustainability is to find a way to offer sustainable products at affordable prices.

“The conversations around sustainability are very, I don’t want to say necessarily classy or elitist, but it still feels like a 1% conversation,” he said. “We haven’t gotten to a space where those sustainable products are equally within the same price range as products that aren’t.”

“Going green is not a luxury statement,” Sandu added.

Sandu envisions a future where the LNQ chip could help incentivize shoppers to stick with their physical products longer, as brands could push updates to the chips with new content, features, or other updates. In the long term, this could change consumer mindsets and allow brands to create a new type of ongoing relationship with customers.

When it comes to Sandu’s decision to build his technology on Polygon instead of the Ethereum mainnet, he cited ETH’s higher gas fees as the main deterrent.

“These ecosystems haven’t really created economies of scale,” Sandu said of the ETH mainnet, adding that he believes Polygon offers fees much closer to a Visa or Mastercard sale.

hardware issues

Sandu’s hardware also allows Spatial Labs to continue building without any of the bottlenecks of app stores like Apple, which has strict rules for developers when it comes to NFT and Web3 items.

“Our chip technology doesn’t depend on, you know, an approval from the Apple app store or anything, it works out of the box, it doesn’t even require you to have an app installed to access some of the metadata. and brands can customize it to their liking,” Sandu said of the NFC chip.

Breaking Barriers with Jay-Z

Sandu believes he is in a unique position as one of the few black founders of a hardware-focused company. He views the investment theses of many venture capitalists as “very biased” and “very biased” against hardware founders like him, in part because there is little historical precedent for potential investors to base their decisions on.

“We’re not just making a funding announcement and getting back to work,” Sandu said. “We are going to continue to break down these barriers that exist.”

Sandu explained that as a Ghanaian-American who grew up in Compton, he was deeply inspired by successful black businessmen like Jay-Z, Beyoncé and Rihanna. Sandu met Jay-Z after working with the late rapper Nipsey Hussle and, separately, Beyoncé in an augmented reality (AR) experience.

Sandu said that when she first connected with Jay-Z, it was “a perfect harmony.”

“Jay is really like a big brother, but also like a good friend, but also like an investor,” Sandu said. “Jay and I have a great business relationship.”

He shared that he and the 24-time Grammy Award-winning musician exchange ideas and share the same vision on how they can make an impact.

“I hope more people will be able to see this unconventional approach to business and be inspired by it to see what it looks like to me, because as much as I love Silicon Valley venture capitalists, I can only relate so much, because the culture is very different,” Sandu said.

“There is such a big divide.”