• by Colin Kirkland , July 19, 2023

In an effort to address payment discrepancies in the growing creator economy, finance platform Karat Financial has launched a new business card in partnership with Visa designed to help social media creators establish credit history and improve capital. The company just raised $70 million from top celebrities, VCs and creators.

“You could be a YouTuber literally making millions of dollars, walk into a bank and get treated like trash,” Karat cofounder Eric Wei told Forbes after working as a product manager at Instagram. Now, he and cofounder Will Kim have a new plan to help leading influencers tackle their finances.

The company announced $70 million in funding on Wednesday made up of a $40 million Series B equity round led by SignalFire plus $30 million in debt financing from TriplePoint Capital and additional funding invested by actor Will Smith's Dreamers VC, video game streamer Ludwig Ahgren and YouTube chef Nick DiGiovanni.

Previous investors in Karat include tech namestays Steve Chen (YouTube cofounder), Biz Stone (Twitter cofounder), and Michael Ovitz (Creative Artist Agency cofounder). Total funding amounts to over $100 million to date.

With Goldman Sachs estimating the creator economy to be worth $250 billion globally today, content creators are still reporting challenges in accessing credit due to traditional banking policies that require consistent monthly income and focus on traditional revenue streams.

Karat -- a “one-stop financial center for creators” that has raised its cardholder base five times since its Series A funding round -- has made a business out of providing creators “an easier path to capital” when applying for mortgages, car loans and other essential financial products.

Wei added, “Our mission is to become a one-stop financial center for creators by providing them with all the tools they need to thrive and scale, so they can focus on what they do best – creating remarkable content that inspires and captivates audiences worldwide."

The new Visa card offers creators the option to build personal credit history through on-time payments while offering low fees and interest rates, exclusive networking opportunities at industry events, access to reimbursement when eligible items are stolen or damaged, and personalized tax guidance.

The Los Angeles-based company decides credit lines not by traditional credit scores but a customer’s follower count on leading social media apps like Instagram, Twitch and YouTube. “Big banks and card companies haven’t moved into the creator space yet because they still see it as something really niche and small—not worth developing this new underwriting model,” Wei told Forbes.