Karat Financial, described as a leader in financial services for creators, recently made headlines with two significant developments.
The firm announced that it has successfully raised a substantial $70m in its latest funding round. The round was spearheaded by SignalFire, with significant contributions from existing investors Union Square Ventures, CRV, and GGV. The round also saw participation from fresh faces such as Commerce Ventures, Dreamers VC, and top creators across popular digital platforms like YouTube, TikTok, Instagram, and Twitch.
Karat Financial focuses on the burgeoning creator economy, valued currently at a whopping $250bn globally. The company provides a range of banking solutions specifically designed to meet the needs of content creators who are often sidelined by traditional banks due to their unique revenue streams. With a Karat business card, creators can conveniently build a personal credit history, giving them improved access to capital whenever needed. Since its last Series A round, Karat has managed to grow its creator cardholder base by 5x.
The newly raised funds will primarily be utilised to expand the company’s current suite of financial services. They are aimed at helping creators scale their businesses and gain access to essential financial products. The company’s recently launched Karat business card offers numerous benefits to creators, including personal credit building, exclusive events and collaborations, purchase protection, and tax simplification.
The company, co-founded by FinTech veterans Eric Wei and Will Kim, has achieved more than $100m in total fundraising to date. The creators’ new financing model provides several benefits, such as improving their chances of approval for mortgages, car loans, and other crucial financial products.
Wei stated, “Our mission is to become a one-stop financial centre 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.”
Wayne Hu, Partner at SignalFire, praised Karat’s unique approach to serving creators’ financial needs. He said, “Karat’s unwavering dedication to serving the needs of creators resonated deeply with us, and they’ve proven out a new financial model, which no one else is doing. We believe the creator economy is a force to be reckoned with, and Karat’s solutions – without the steep fees or high-interest rates of other cards – positions them at the forefront of this powerful movement.”
In addition to the $70m, the firm disclosed the partnership with Visa to launch a new business card. This card, tailored specifically for creators, aids them in building their personal credit history and securing capital access.
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