[ad_1]
Like many sectors, creator-focused startups had an easy time of attracting funding in 2020 and 2021. But venture capital investment into this category slowed down significantly starting in the second half of 2022: going from 42 rounds worth $336 million in Q2 2022, to only 19 rounds worth $110.2 million in Q3 2022.
At the time, Nate O’Brien of Roadrunner VC said it best: “The creator bubble is popping.”
The Exchange explores startups, markets and money.
Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.
As is often the case with hyped sectors, they end up deflating when the market isn’t favorable. And it gets worse if you’re in a category that depends on the fickle advertising market, which is strongly exposed to macroeconomic fluctuations. But more importantly, the rise of the creator economy was largely driven by factors that proved to be quite temporary.
“The growth in the creator space was fueled in two parts: by COVID and [by] the boom in e-commerce (the primary advertiser in the creator economy). People have largely returned to their ordinary lives, and e-commerce has reverted to its usual pace, so the slower growth of the creator space is not surprising,” Coventure partner Brian Harwitt told TechCrunch+ in a recent investor survey.
Sure, it isn’t surprising, but it still means that new startups hoping to solve problems for creators and help them generate revenue are today often struggling to raise money, and probably expand as well.
Venture rounds and younger startups form only part of the picture, though. There are many outliers to be found if you simply examine the set of companies that raised plenty of cash before the ad market started to cool down, and chief among them is OnlyFans. It’s actually one of the best companies in the space right now, period.
OnlyProfit
It’s often difficult to get a good picture of the state of some businesses, especially late-stage startups and large private tech companies, as we usually only have incomplete or delayed data to study. With OnlyFans, we have strong and complete information; it’s simply dated. Thanks to data from its British parent Fenix International, we have OnlyFans’ results for its fiscal year ended November 30, 2022, which is basically all of calendar 2022. Huzzah!
[ad_2]
Original Source Link