Creators and influencers like Bernstein are forging a path from content creator to full-fledged business, with multiple revenue streams via podcasts, licensing deals, branded merchandise and even software products.
Tech entrepreneurs, quick to pounce on any emerging economy, have also begun building services for creators and influencers from marketplaces that connect individuals with brands, financial solutions that help capitalize burgeoning influencer-led businesses, tailored monetization platforms and even a “LinkedIn for Influencers” intended to foster connections between influencers and brands.
“We are in phase three of the influencer economy,” Bain Capital Ventures senior principal Jamison Hill, who led the firm’s investment in the influencer shoutout marketplace Cameo, tells TechCrunch.
While some businesses, like Cameo, have successfully raised venture financing, VCs have yet to fully tackle the influencer and creator economy.
“2020 will be a watershed year for investment in businesses around the creator economy,” Neil Robertson tells TechCrunch.
As venture capitalists wake up to the business opportunity, they’re seeding startups that help influencers go from hobbyists to professionals.
Karat, a startup expected to enter Y Combinator’s Winter 2020 batch, is building a “bank for creators,” with its debut product focused on lending to individuals through a revenue-share agreement.
The company was co-founded by Eric Lei, a former product manager at Instagram who focused on the creator and influencer side of the business.
The company plans to give creators and influencers more independence from existing platforms by allowing them access to funding from a team well-versed in their unique capital needs.
Banks won’t underwrite an individual based on qualifications like their Instagram following, of course, and given that influencers don’t typically have a consistent income or a W2 statement to showcase their earnings, they may not be able to receive a bank loan to invest in their own brand.
Influence’s Robertson tells us venture capitalists were initially uncertain of his latest startup despite his track record, which includes the sale of multiple software businesses, including the affiliate marketing company VigLink.
“We needed VCs to rethink how value could be created in the influencer marketing space.”
The first businesses to crop up in the space were traditional two-sided marketplaces: influencers on one side, companies and brands on the other.
Ben Jeffries launched his startup, Influencer, in London in 2014 after his close friend matched with Caspar Lee, a YouTuber with 7.3 million followers, on Tinder.
“There’s money coming into the industry and with this influx of money is more companies entering the market,” Influencer co-founder and CEO Jeffries tells TechCrunch.
The Australian startup, which connects brands to “micro-influencers,” or every-day people with more than 3,000 followers on Instagram, Twitter or Facebook, raised a $7.5 million Series A in March.
With the expected influx of venture cash, entrepreneurship from creators themselves and startups looking to capitalize on the phenomenon, the creator and influencer economy is poised for a boom.