YouTube content has come a long way from Me at the zoo, and though the lo-fi video style has seen a resurgence with the popularity of TikTok and YouTube Shorts, long-form content continues to see higher, glossier production value.
But that production value requires upfront investment, and sometimes the money creators are currently earning from their content isn’t enough to fund videos they want to make in the future. That’s where creator-specific financial services companies come in. As the creator industry has matured, more and more creators have become entrepreneurs, small business owners, and even investors (in each other, and in platforms). And, in recognition of their growing need for capital, an entire financial services empire has sprung up to offer creators the cash they need to further their careers.
One of those companies in Fundmates. Founded in 2022 by Ilia Dronov, Daniel Galper, and Jake Scherbak, the company has paid out tens of millions of dollars to hundreds of creators, and says creators who receive its funds “see growth of 30-60% within just 4-6 months.”
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It’s distributed $25 million to creators so far this year, and plans to distribute another $30 million by the end of 2024.
Fundmates says it’s different from a lot of other entrants in the creator financial services space because it doesn’t license creators’ back catalogs (which is a popular form of collateral for creators getting lump-sum capital) or take any control or ownership of their channel (MCN-style). It also says it works with creators who receive funds to mentor them and help them grow their channels while they’re paying back their loans.
“At Fundmates, we do more than just offering financial support. We build long-term partnerships with our creators, helping them unlock their full potential,” CEO Dronov says. “Our approach gives creators not just the capital they need, but the insights required to stay ahead in this competitive space, while continuing to innovate.”
So if it doesn’t do catalog licensing or take part ownership in creators’ channels, how does Fundmates make money?
Automotive YouTuber Joshua Acosta explained that his deal with Fundmates gave him a lump-sum loan, and that “the payment terms are tied to my channel’s success.” (Fundmates didn’t disclose specifics, but we’re guessing it profits by charging interest, like other lenders.)
He also points out that prior to hooking up with Fundmates, he was exploring traditional loans. Those, as Fundmates notes, can be difficult for creators to access, since banks often want to see stable, regular income (something that AdSense often does not provide), and are leery of lending to people who are self-employed. Though outside institutions are gradually coming to see our industry as the powerhouse it is and creators for the businesspeople they are, it can still be more difficult for creators to get small business loans, and often depends on whether the individual bank they’re speaking to understands content creation can be a real, lucrative job.
Fundmates, meanwhile, says all it needs is a look at channels’ analytics, and will give creators lump sums of up to 14 times their average monthly AdSense revenue.
“The best part?” Acosta said. “There’s no impact on my credit score since it’s not a traditional loan, and the payment terms are tied to my channel’s success. Within a week of applying, the funds were in my account, ready to be used on my projects. Plus, I now have access to a team of experts who help with everything from editing and thumbnails to additional videos and channel valuations.”
Dronov says Fundmates hopes to use the $30 million it’s allocated to fund hundreds more creators like Acosta in Q4 2024.
“Our main focus is funding mid-size creators who know their growth potential–we’re an accelerator for the next generation of YouTube stars,” he says.
Fundmates is a Tubefilter partner.
