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Last summer, 28-year-old co-founder Tucker Schreiber, combo was building a video editing platform, he noticed a lot more emails in his inbox. Although his company had no employees, no products, and didn’t say he was looking for money, investors were sending him a series of messages.
“I started getting five to 10 emails a day from investors for a few weeks,” he said.
Mr. Schreiber’s establishment was experiencing a boom in investors targeting the so-called creative or influencer economy. The boom in the creative economy has rekindled interest in social media among venture capitalists who thought there was little point in looking for social startups like Facebook and Snap (which owns Snapchat), which for years had sucked all the air out of the market. .
Content creators are people who create online audiences and find a way to monetize those audiences. They are usually young, digital natives trying to make a living from their social media work. And big Silicon Valley investors are increasingly seeing them as the next financial vein to leverage the internet.
The creative economy, which provides influencers with digital tools and helps them run their businesses, is a large, largely unexplored market. venture capital firm SignalFire With an estimated 50 million people worldwide seeing themselves as content creators, the tech news site Information He estimates that venture capital firms have invested $2 billion in 50 creatively-focused startups so far this year.
The growing interest of traditional venture capitalists may offer legitimacy to what some still consider to be extreme business. It may also contribute to the idea that this growing world of dance, conversation and comedy is more than just casual youth culture.
But as they say, don’t invest in gold miners, sell them their tools. Silicon Valley seems to be much more interested in the digital tools and platforms creators use than directly investing in the creators themselves.
For example, last month venture firm Founders Fund took the lead in a $15 million investment round. pietra, an initiative aimed at helping influencers launch their product lines. In April, Seven Seven Six, a venture firm led by Reddit co-founder Alexis Ohanian and Bessemer Venture Partners, announced $16 million investment Pear Pop, a platform that helps creators monetize their collaborations and social media interactions.
The list goes on. In February, high-profile venture firm Andreessen Horowitz spearheaded an investment. Confuse, a platform that helps creators manage how they make money and is worth $100 million to the company.
Dispo, a photo-sharing app that mimics the experience of digital cameras, has received $4 million in a funding round led by Seven Seven Six and an additional $20 million led by Spark Capital. Startup daredevil Benchmark spearheads a round of investment Reportedly worth $20 million An app on Poparazzi that allows users to post photos to their friends’ profiles, effectively turning their group into “paparazzi”.
And then there’s Clubhouse, the weight of this young market that’s generating plenty of buzz from Silicon Valley and the media and entertainment world. Requiring an invitation to join, Clubhouse is a social network built around voice-only chat rooms. In April, it raised $200 million in a funding round led by Andreessen Horowitz, raising its valuation to nearly $4 billion.
“When I first started venture capital in 2016,” said Li Jin, founder of Atelier, a venture firm focused on the world of online creators, “there was a widespread belief that it would be really difficult for another major social network to emerge.
TikTok screwed them all up. Focusing on influencers, the app has forced changes to traditional social networks like Instagram and Twitter, which avoid serving people who create popular content on their platforms.
TikTok has allowed more promising social media personalities to be discovered, giving them a clearer direct path to monetize through the company’s Creative Fund, which pays creators a set amount based on opinions.
“The old social platforms were all about interacting with your friends online,” said Linus Walton, vice president of Chernin Group, an investment firm. Now “it’s all about being that influencer or that new TikTok star that all your friends are watching.”
Subscription services like OnlyFans and Patreon, where fans pay creators for access to premium content, have helped investors realize that there is a strong business rationale for building tools for creators. The word “creative” has now become a buzzword added to all types of businesses to attract investors. so much so that Alexander Finden, a tech entrepreneur,creative wash”
“There are more creative economy start-ups than creatives,” said Turner Novak, founder of Banana Capital, which invests in early-stage tech startups. joked on twitter in April.
Rex Woodbury, 27, director of San Francisco investment firm Index Ventures, represents a bit of both worlds. It started out as an influencer and has built an audience of over 237,000 followers. Instagram by submitting lifestyle content. After graduating from college, he went full-time investing, where he established himself as an authority in the creative economy.
“I’ve seen a few posts from VCs saying, ‘Eight out of 10 companies I met today are creative companies,'” Mr Woodbury said. “It’s really fashionable now.”
He joined Index Ventures in December when venture capitalists were starting to engage with creators and sought help from people who understand the landscape.
“Many young investors feel credible about this because we are digital natives,” Mr Woodbury said. “This is the world we grew up in.”
Now big platforms like Spotify, Twitter and Facebook are rushing to catch up with start-ups, especially Clubhouse. Spotify recently announced its new live audio app Greenroom, a rival to Clubhouse that Spotify created after it acquired live audio startup Locker Room. Twitter has already added its own Clubhouse competitor, Twitter Spaces, and both Twitter and Facebook are starting their newsletter services to compete with the success of Substack, which allows users to easily create subscriptions for their posts.
As the lines between venture capital and the creative world are blurring, many traditional venture capitalists aim to be creative. Firms like Andreessen Horowitz have leveraged their investment in Clubhouse to promote their employees through the app’s suggested user list. Nait Jones, partner of Andreessen Horowitz, has amassed over four million followers on Clubhouse and recently signed with talent agency WME.
Still, as investors race to put their money into social media startups, it’s less clear whether some apps in the market will survive. Dispo, The busiest social media initiative of February, met with backlash after a month YouTube star David Dobrik, one of the founders caught in controversy On allegations of sexual assault against a member of the “Vlog Team”. Soon after, Spark Capital said it had severed all ties with the company. Seven Seven Six has not severed ties, but has said it will donate profits to an organization that works with survivors of the attack.
According to app research firm Sensor Tower, Poparazzi, which ranked top among free iPhone apps in the last week of May, dropped to number 156 by mid-June. And Sensor Tower data reports Clubhouse had 5.3 million downloads in the first two weeks of June, while the Android app, introduced in late May, had 4.8 million.
“For years, no one cared or recognized this space as a real money space,” said Bobby Thakkar, 21, co-founder of Ampersand, a product studio that develops tools for content creators. “Now, with the money flowing into the industry, we will only see more companies, more competition, and more start-ups that include content creators as part of their business.”
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