- Startups are eyeing social-media stars as potential customers for financial services products as the influencer industry continues to grow.
- Last month, the fintech startup Karat introduced a custom charge card for influencers, looking at a creator’s social metrics, like follower count and engagement rates, rather than their FICO score to assess whether they qualify for its card.
- This week, the influencer-tech company ChannelMeter is launching a cash payment app for YouTubers with the goal of eventually selling banking and other financial service products to creators.
- Subscribe to Business Insider’s influencer newsletter: Influencer Dashboard.
A new crop of fintech companies is raising capital and launching financial products aimed at YouTube, TikTok, and Instagram creators.
Last month, the fintech startup Karat introduced a custom payment card for creators. The company, which raised $4.6 million in seed funding, looks at a creator’s social metrics, like follower count and engagement rates, rather than their FICO score to assess whether they qualify for its card.
And this week, the influencer-tech company ChannelMeter is launching a cash payment app, “Creator Cash,” which offers YouTube stars a cash advance on their advertising earnings while they wait to get paid out by Google.
ChannelMeter eventually plans to expand its payment app to support influencers who earn money from other sources, including Facebook and IGTV advertising, Instagram and TikTok brand deals, and Patreon memberships (though the company said some forms of income that aren’t traceable through platform APIs will take longer to integrate into its app).
Both Karat and ChannelMeter are dangling easy-to-use financial products in front of creators with the longer-term goal of building out a suite of financial products like banking and tax services designed for the influencer economy.
“It’s a Trojan horse,” ChannelMeter’s CEO Eugene Lee said of the company’s cash payment app. “The goal is to provide true value first. Win their trust. And then deploy our next series of products.”
ChannelMeter said it expects to initially lose money on Creator Cash. The company isn’t charging interest on upfront remittances, though it will pass on a 3% disbursement fee that its payment-processing partner Stripe charges for instant payments.
App users have 30 days to pay back any upfront advances from Creator Cash, though the company said it expects that some of its early users won’t be able to pay back in full on that time frame. In order to qualify for Creator Cash, a user must be a part of YouTube’s partner program (meaning they have at least 1,000 subscribers and comply with Google’s monetization policies).
“This is not intended to be a revenue generator,” Lee said. “In the event they can’t pay back, we’re very well aware we took the risk. We planned for this risk. We planned for these events. Obviously we want to minimize that as much as possible and we’re going to do that with software and data, but, if a creator can’t pay back, they can’t pay back, and we’re just going to be smarter about who gets advances.”
Founded in 2012, ChannelMeter’s core business has been selling software to media companies, marketers, and brands for influencer marketing, digital rights management, and other forms of social-media monetization. After processing millions of dollars in creator payments through its various business lines (and hearing anecdotal demand from influencers for more financial services tailored to the creator industry), the company decided to raise a $4 million round of financing this year to launch Creator Cash and lean into fintech. Lee believes ChannelMeter’s background in influencer software offers a strategic advantage over traditional financial institutions that haven’t worked as much in the creator space.
“A lot of these creators are credit thin,” he said. “They’re underbanked. As these creators grow, they’re going to need the support of financial institutions. They’re going to need the support of someone like a bank who can help with capital. Who can help with credit. Who can help them grow and really put fuel in the fire of their business.”
For more stories on how influencers are turning to startups and tech platforms to grow their businesses, check out these other Business Insider posts:
- Fintech startup Karat has launched a new charge card designed for YouTube, Instagram, and TikTok stars that looks at social-media engagement rather than credit history: Business Insider spoke with Karat’s cofounders Will Kim and Eric Wei to learn more about their plans to build a financial-services brand for creators.
- Influencers describe what it’s like to use Community, the invite-only marketing app that lets them text message with their fans: Business Insider spoke with influencers testing out Community’s app to learn more about the invite-only platform.
- Meet the startup helping YouTube creators earn millions in extra ad revenue by reposting their content on Facebook and Snapchat — including $68,000 from a single video: Posting videos across YouTube, Facebook, TikTok, and Snapchat can be a headache for creators. Startup Jellysmack is trying to streamline the process.
- Marketers share what it’s like to use TikTok’s invite-only tool for finding the right influencers to hire for brand deals: TikTok is growing up as an influencer-marketing platform with the release of new audience-data tools for both creators and brands.
- What influencers should know about Facebook’s new app for video creators, Creator Studio: Facebook created a new mobile app version of its publishing and analytics tool, Creator Studio, as it continues to make moves to compete with YouTube.
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