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If you’re finding value in our Creator Economy newsletter, I encourage you to consider subscribing to The Information. It contains exclusive reporting on the most important stories in tech. Save up to $250 on your first year of access. Hello! When Pepsi acquired probiotic soda maker Poppi in May for nearly $2 billion, influencer Alix Earle also won big. The TikTok star, who promoted the brand on social media and appeared in the company’s Super Bowl commercial, got equity in the company rather than just the typical cash payment. Curate Capital, a venture capital firm that invests in early-stage consumer goods companies founded by women, sees an opportunity for more creators to invest in startups, which still isn’t the norm. When the Houston-based firm closed its first $15 million fund in 2022, about a dozen creators collectively invested about $4 million as limited partners. Now, as the firm targets $80 million for its second fund, it wants to take its influencer efforts a step further. Curate, in addition to taking on these influencers as limited partners, will also match some of these creators with their portfolio companies to get involved in other ways, such as consulting on the companies’ marketing strategies or sitting on advisory boards. To spearhead these efforts, RJ Larese joined Curate’s advisory board as a venture partner and head of what it calls “influential investing.” Most recently, Larese was vice president of talent and influencer marketing at Paramount Global, including its streaming service Paramount+. “Creators are so concentrated on this moment,” he said in an interview. They’re thinking, “‘What is the algorithm right now? What’s the brand deal that’s coming through right now?’ They’re not thinking about the future.” Larese also points out that many creators rely on building followings on social networks, where they don’t “own” their audience, so investing is another way for them to diversify revenue and think about their future finances. As a creator, “I make a million dollars in brand deals over the years. What if I invest $200,000 of that instead of spending it on an exorbitant house that I'm renting? And what if I’m putting it in something that I truly believe in?” he added. Of course, the risk to VC investing is that many startups fail. For its part, Curate chief operating officer Conor Mack said that multiple companies it backed as part of its first fund have doubled, or in some cases tripled, in revenue and valuation, since it invested in them less than four years ago, including creator-founded beauty upstart Live Tinted, which is still private. Mack declined to share performance except to say that its first fund has been performing at the top 10% of venture funds launched in 2021 as of the first quarter, based on total value to paid-in capital, a metric that measures both cash distributions to limited partners and paper returns, based on Carta’s VC Fund Performance report. Carrie Colbert, Curate’s founder and general partner, previously worked in the oil and gas industry. But in her spare time, she became something of an early Instagram influencer by sharing photos related to fashion and travel soon after the app launched in 2010. Over time, she started getting paid by brands who wanted to be associated with her content and also asked some of the companies if they were looking for investors, such as Austin-based party supplies and accessories company Packed Party, whose board she also joined. The company was acquired last year by Bioworld Merchandising, a manufacturer of licensed apparel, accessories and home goods. The experience gave her the idea of bringing creators as LPs into her fund, which she started in 2020. “I saw that influencers were wanting and deserving equity, that they were wanting a piece of the pie that they were helping to grow,” Colbert said. The minimum investment amount for the fund’s LPs, including creators, is $250,000, though Colbert said it doesn’t all have to be paid upfront. Curate tends to make investments of between $500,000 to $1.5 million in startups that have at least $1 million in revenue. Startups it has backed includes healthy cookie dough company Deux and Glamhive, which connects customers with makeup and hair stylists. The firm focuses on backing companies in health and beauty, food and beverage, home and family, and fashion and apparel. The remaining 20% of the second fund will be for “anything compelling that we come across,” including artificial intelligence, Colbert said. “We love that we’re investing in things that you can see, feel and touch and actually use,” she said. “We could invest in different creator economy companies that maybe are leveraging AI. We could invest in something for the consumer that leverages that. So we certainly don’t shut ourselves off.” Here’s what else is going on… See The Information’s Creator Economy Database for an exclusive list of private companies and their investors. Runway, an AI video startup, is in talks to raise around $500 million at a valuation of at least $5 billion before the investment, in a fundraising led by existing investor General Atlantic and the Qatar Investment Authority, a new investor, The Information reported. Instagram rolled out a new feature called Reposts, so that users can share Reels and photos from other users. Previously, users could only repost content to their disappearing Stories. Now they can share such content to other people’s feeds and their own profile pages. It also added a new “Friends” tab in Reels to show videos friends have liked, created, reposted or commented on. Instagram also rolled out a map feature to see what friends are up to, similar to Snapchat’s popular Snap Map. The map also shows content posted by friends and creators from specific locations. Substack announced new features, including title testing, which helps writers determine which headlines are most effective for their posts, similar to how YouTubers test different thumbnails for videos. It also added more ways to customize Substack profiles, including by adding cover photos and different colors. Locket, an app that shows pictures from friends on a smartphone’s home screen, announced Celebrity Lockets, which allow musicians, artists and other public figures to share news and other content to their fans’ phone screens. Eleven Labs launched Eleven Music, a software to generate songs from text prompts. The AI voice startup said the outputs are approved for most commercial uses. Patreon announced that fans have now paid creators more than $10 billion since the startup launched in 2013. There are also now more than 100 million free memberships on the platform, triple the number from a year ago. Kajabi, best known as a service for creators to sell courses and other digital products like memberships, announced its creators have hit $10 billion in sales since the company’s 2010 launch. Five months ago, that figure was $9 billion. Kajabi charges creators a monthly fee to use its services, and doesn’t take a cut of creators’ revenue. Ghost, a newsletter publishing service, announced that publishers have earned more than $100 million on its platform since its 2013 launch. Similar to Kajabi, Ghost charges a monthly fee to use its service. Sophie Cunningham, a guard for the Indiana Fever, said the WNBA fined her $1,500 for criticizing referees in the first episode of her new podcast, “Show Me Something.” In July, she was fined $500 over comments she made in a TikTok video, also about the league’s refs. Katie Feeney, a sports-focused creator, signed with ESPN to create content for the publisher’s social and digital channels. Rachel DeMita, a former Division 1 basketball player who hosts the podcast “Courtside Club,” signed with UTA. Thank you for reading the Creator Economy Newsletter! I’d love your feedback, ideas and tips: kaya@theinformation.com. If you think someone else might enjoy this newsletter, please pass it forward or they can sign up here: https://www.theinformation.com/newsletters/creator-economy
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