Spotter, a startup specializing in creator financing and AI tools, has secured an additional $7.4 million in funding, according to a recent Form D filing. 

Per TechCrunch, this latest capital injection follows SoftBank’s substantial $200 million Series D round in 2022, which valued the company at $1.7 billion.

The company’s core business model involves providing upfront capital to established YouTubers in exchange for licensing portions of their content. Spotter retains the ad revenue from the licensed content to recoup its investment without claiming copyright or intellectual property rights.

According to TechCrunch, Spotter reports investing $940 million across more than 735 YouTube channels. The company’s client roster includes high-profile creators such as MrBeast and The Try Guys. 

MrBeast utilized the upfront capital to finance a Spanish-language channel, resulting in a 300% growth in viewership across his channels, amounting to 1.35 billion monthly views.

Spotter founder & CEO Aaron DeBevoise told TechCrunch that creators often engage in multiple deals with the company, reinvesting in their content as they see success. 

This model addresses a gap in the creator economy, where traditional financial institutions may hesitate to provide funding despite the profitability of many creator businesses.

Concurrent with this funding announcement, Spotter has launched Spotter Studio, an AI-powered suite of tools for creators. While the company has not disclosed specific plans for the new $7.4 million, the timing suggests a potential connection to this latest offering.

Success and Challenges in Creator Financing

The creator financing space is becoming increasingly competitive, with companies like Jellysmack and Creative Juice adopting similar investment models.

In July, Creative Juice announced its merger with Rho, a business banking platform, to accelerate the delivery of business banking experiences for creators. 

Creative Juice co-founder Sima Gandhi revealed that the decision to merge came after prominent creators sought improved financial services.

Jellysmack recently sold its JellyFi catalog licensing business unit to Copyright Capital. JellyFi was Jellysmack’s investment arm launched in early 2022, setting aside $500 million to pay creators upfront for the rights to future ad revenue from their content. 

However, the business faced challenges in convincing top influencers to hand over their valuable YouTube channels.