Exclusive: Creator startup Spotter raises another $7.4M

exclusive:-creator-startup-spotter-raises-another-$7.4m

Spotter, a startup that underwrites creators and offers AI tools, raised $7.4 million, according to a Form D filing viewed by TechCrunch. A representative for Spotter confirmed the filing’s legitimacy, but did not offer further details.

This additional funding is much smaller than Spotter’s most recent raise, a $200 million Series D round led by SoftBank in 2022. Spotter, then valued at $1.7 billion, raised that funding to underwrite YouTubers’ businesses. Spotter provides powerhouse YouTubers like MrBeast and The Try Guys with upfront capital to grow their channels, but in return, they have to license some of their content to Spotter for years at a time. Spotter doesn’t take copyright or intellectual property from creators — the company recoups its investment by earning the ad revenue from the content it licensed.

Spotter has invested $940 million into more than 735 YouTube channels, according to its website. This business model has been popular among creator startups — other companies like Jellysmack and Creative Juice have also made these kinds of investments in creators.

As players in a newer and misunderstood industry, creators often have trouble securing funds from traditional financial institutions, even if they have profitable, healthy businesses. So, startups that clock this disconnect have stepped in — Karat, for example, offers financial resources to creators like business credit cards. In some cases, venture capitalists have even invested in creators to give them the capital that they need to grow their businesses.

For Spotter, this means that the company has an advantage — it can offer creators millions of dollars in capital (which it reasonably can expect to recoup), but the creators themselves don’t have many other options to secure that kind of funding. Still, creators who partner with Spotter seem to have positive results. The company told TechCrunch in 2022 that MrBeast used his upfront cash to finance a Spanish-language channel, where his viral videos are dubbed to reach a Spanish-speaking audience. At the time, Spotter said that in the few years they had worked with MrBeast, he had grown his viewership by over 300%, amounting to 1.35 billion monthly views across all of his channels.

“Creators have done second and third deals with us, so it’s not a one-and-done type of situation,” Spotter founder and CEO Aaron DeBevoise told TechCrunch. “Six months later, they [do another deal] because they see the success of reinvesting in themselves.”

Spotter declined to share what this funding would be used for. However, this additional raise comes around the same time as the launch of Spotter Studio, an AI-powered suite of tools for creators.

Source: Techcrunch

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