Like their peers in tech and advertising, creative startups have had to adapt to a changing economic landscape, resulting in a wave of layoffs, fire sales, and slowing investments: unicorn startups like Jellysmack have downsized, and others, like BEN Labs, have been forced to restructure.
But firms like Goldman Sachs remain confident the sector will become a significant part of the marketing industry in the coming years, and things are starting to look up again for creative startups.
Venture capital investment in creator startups has been declining for much of 2023 but is beginning to recover, particularly in the U.S., The Information reported earlier this year. Startups have been raising seed and later-stage funding from venture capitalists, albeit at a smaller scale.
For example, PunchUp, a comedy startup that helps comedians sell tickets and promote their live events, closed a $1 million funding round in November, and other companies including Beehiiv, WorkWeek, Storiaverse and ShopMy have also raised millions in the past year.
Investors like Daybreak Ventures' Rex Woodbury are looking at innovative shopping applications that combine commerce and content, an area that has been continually tested since the rise of the creator economy, with Woodbury pinning his hopes on “discovery-driven shopping” tools like digital storefront startup Flagship.
“In venture, you always have to be careful of the hype,” Woodbury told Business Insider. “It's a really contrarian industry. When something becomes unpopular, it becomes more attractive, right? Because that's how you find under-the-radar companies and exceptional but not expensive founders.”
Artificial intelligence will continue to be a focus for many investors in 2024. It will impact the creator economy as startups develop ways to supplement and in some cases replace humans in completing creative tasks. For example, A* Capital has invested in AI tools for creators over the past year, including EyeTell, founded by YouTube co-founder Chad Hurley.
Creators and creator-founded brands like Chamberlain Coffee and MrBeast's Festables have also raised venture capital. Chamberlain Coffee announced a $7 million round of funding in June from investors including Volition Capital, Blazer Capital and the investment arm of United Talent Agency.
“The big question is… how do you break through the noise,” said Kamran Ali of Inspired Capital, which led ShopMy's latest round, adding that Inspired talks closely with brands and creators to hear what products and startups they find compelling, which then guides its investments.
Business Insider profiles 11 venture capital firms and their partners that are focused on finding the next wave of promising creator economy startups. This list is our fifth annual and was compiled by BI based on our reporting and the nominations we received. We looked at each firm's investments over the past year to understand how they're funding new ideas in the creator industry.
The venture capital firms are listed below in alphabetical order.
