Creative Juice launches a $50M fund to invest in creators – TechCrunch

A banking app built for online creators, Creative Juice announced its $50 million fund to underwrite creator businesses. YouTubers and other social media stars stars can apply for upfront cash to grow their businesses in exchange for a cut of their revenue over a certain period of time, usually between six months and three years.

It sounds like a loan, but it’s not a loan (at least in the sense that Creative Juice isn’t a bank, so they’re not allowed to say they give loans.) They refer to distributing “Juice Funds,” their investments in creators, as underwriting creator businesses, or as revenue-based financing. But Juice Funds don’t accrue interest like a loan. And if the creator fulfills the terms of their contract, yet doesn’t make enough money to pay back their Juice Funds before their term is up, then it’s Creative Juice that eats the deficit, not the creator.

So far, according to CEO Sima Gandhi, there haven’t been any issues with creators not being able to pay Creative Juice back. This is in part because Creative Juice is so selective about whom it funds.

“Creators are the next generation of [small and medium-sized businesses] in America,” said Gandhi, who was formerly the head of business development and strategy at Plaid, a fintech unicorn. “If you’re a content creator, you can now set up an Instagram shop, you can sell merchandise, you can sell tickets to things, you can sell food. You can do anything a typical business would do, yet they’re not treated like a business.”

It’s difficult for creators to get loans from banks, since their line of work is less established than your standard small business. Other startups have also sprung up to help fill in this gap like Karat Financial, which offers creators access to business credit cards.

“Any industry needs capital to grow, and it’s actually really remarkable that creators have grown as quickly as they have without access to capital,” Gandhi told TechCrunch. Creators might use these funds to…

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