Financial services company “Karat” raises US$26 million in Series A to provide credit for creators

When an internet celebrity is also an entrepreneur, an internet celebrity is an entrepreneur.

According to foreign media CrunchBase , the financial services company Karat Financial , known for its creator credit cards, recently announced the completion of a US$26 million Series A financing, including US$11 million in equity and US$15 million in debt. This round of financing was led by Union Square Ventures. GGV Capital, SignalFire and more than 20 creators participated in the round, including TikTok, co-founder Josh Richards and actor Jared Leto.

The idea behind this Los Angeles-based startup is that creators and influencers are the business itself, but the traditional financial system does not treat them as corporate customers, but only provides personal credit support. Karat judges the creator’s “business scale” based on non-traditional indicators such as audience participation and provides corresponding credit guarantees.

Financial services company "Karat" raises US million in Series A to provide credit for creators

Picture cut from the company’s official website

Co-founder Will Kim said: “Users of social platforms want to meet their entertainment needs through the content of the community, and creators are responsible for leading the trend on these platforms. Therefore, creators should be regarded as enterprises just like APP development companies, because Both have created value for the establishment of the community. In fact, traditional financial institutions have not given creators the recognition they deserve.”

Karat first launched a black card for creators and internet celebrities last year . Since then, co-founders Eric Wei and Will Kim moved the company to Los Angeles, the gathering place of INS Internet celebrities in the United States, in order to expand more customers. It is reported that Karat’s business scale has maintained a monthly growth of more than 50% since its establishment.

Wei said that since the COVID-19 epidemic, the importance of “content” on social media has become more and more prominent, because mobile phones and computers have become major entertainment and social tools during people’s home isolation. Nearly half of Karat’s growth came during the epidemic, because a large number of creators and internet celebrities needed to produce works at a higher frequency, which resulted in a large demand for payments and loans.

“From the perspective of the company, in the past year, our core has shifted from judging “Can this creator be called a company?” to “How should we help and participate in its business?”, and actively explore Other financial products and services that the creator may need. “Wei added.

Financial services company "Karat" raises US million in Series A to provide credit for creators

Picture cut from the company’s official website

The company will use the funds to expand its current 14-member team and invest in developing new products and acquiring new users. Wei said that the main purpose of this round of financing is to expand the scale of Karat’s existing business, and the next phase of the task is to expand new business and establish a savings account similar to a digital bank.

Andy Weissman, managing partner of Union Square Ventures, said in a statement, “Creators and influencers are catalyzing a new and decentralized wave of entrepreneurship , but even the most successful creators are being shut out of traditional banking services. Eric and Will provide creators with critical support to help them obtain the financing they need in a new way. Karat’s business has been continuously proven its feasibility with growth and benefits since its launch.”

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/financial-services-company-karat-raises-us26-million-in-series-a-to-provide-credit-for-creators/
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