pay for popularity

This inspired two youngsters, Eric Wei and Will Kim, to come up with the idea and set up Carat Financial Company to help social media stars manage their finances. Wei said, “You can be a YouTuber making literally millions, going to the bank and being treated like garbage.”

He noticed this problem when he was a product manager at Instagram and had the opportunity to work with many creators. Yet despite its size and potential, many creatives still struggle with mortgages, personal loans and financial management. Banks still see it as a freelance job with unstable income.

On July 19, Karat announced $70 million in new funding, including investment from celebrities such as Will Smith. The company now provides credit card and banking services to social media sellers and content creators. They also announced a new bank card in partnership with Visa that helps creators establish a better personal credit history than using a business credit card.

Established in 2019, Karat is headquartered in Los Angeles (USA) with the operating principle of Pay for Popularity. In lieu of a traditional credit score, Karat offers a series of credits based on a creator’s social influence and customer followings on apps like Instagram, YouTube and Twitch.

Both founders say they will use the new round of funding to grow and distribute the product, making Karat a one-stop-shop for creators’ funding needs. Wei calculates that over the past 10 years, Creative’s products have now made an economy.

Karat’s card allows users to build personal credit and gain access to entertainment programs, co-branding, purchase protection and tax assistance. The company is starting a loan service for creative people.

While not sharing user details, Karat says that the customer base has grown five times since 2021. And the total social media following of content creators using Karat’s cards exceeds 1 billion.

Moving forward, Karat aims to be a social network and financial partner of artists, creators, freelancers in everyday life. “We’re at the point where everyone we meet knows one of the company’s customers,” Wei said.