Karat Financial 26M Union VenturessilberlingTechCrunch, a startup that has developed a prepaid credit card for digital content creators, has raised an additional $26 million in a new round of funding. This is the second round of funding that the company has received and marks a significant milestone in its efforts to expand into the US. The company will use the new capital to grow its operations and help accelerate its growth as it seeks to become the premier provider of business credit cards for digital content creators.
Funding Round
Karat Financial 26M Union VenturessilberlingTechCrunch offers a credit card tailored to creators. They use proprietary underwriting to determine whether a digital creator is worth the credit. The company says the card was designed to help the average creator with a million followers get a better handle on their finances.
Palo Alto
According to its website, the company is headquartered in Palo Alto, California, and has secured funding from Union Square Ventures, SignalFire, GGV Capital, and Lucky Capital. The company also received a spot in the Y Combinator Winter 2020 accelerator. Its founders are Will Kim and Eric Wei, two Instagram alums who teamed up to launch the social networking site. In the process, they found they could use their expertise to create a better banking system for creators.
Suite of Financial Tools
Their credit card has no fees and features a suite of financial tools for the savvy creator. The company even offers a tax preparation service. Among the other offerings are a bank account, which they plan to extend to other creators in the future.
They also have a new product, the Black Card. Unlike a traditional credit card, the Black Card is offered through a partner bank. The card offers a credit limit that is based on the user’s social media following, as well as current revenue.
Business Credit Cards for Digital Content Creators
Karat Financial 26M Union VenturessilberlingTechCrunch credit cards can be a great way to keep your business and personal expenses separate. These cards are often geared toward business spending, so they offer convenience and rewards for making everyday company purchases. They can be applied for online or through the mail. Some businesses even have cards that allow you to customize spending privileges for employees.
When applying for a business credit card, it’s important to be honest about your revenue and expenses. Most issuers will run a hard check on your personal credit report, but it’s not necessary to have a perfect score to get a credit card. A higher score can help you secure a better credit card, but you should make sure you can pay your bills.
The best business credit card will be one that offers the highest value in benefits and rewards. For instance, a business card that offers a 0% intro APR promotion for the first 12 months on purchases is a great deal. Also, you should choose a card that rewards you when you make your payments in full.
Discounts or Free Travel
Having a high personal income can also help you obtain a business credit card. It’s best to get a card that lets you earn points or other benefits, such as discounts or free travel.
Co-founders’ Ambitions
For a company in its infancy, Karat Financial has had an impressive start. The San Francisco fintech startup has already secured a spot in Y Combinator’s Winter 2020 class of startups. And has racked up some notable investments along the way. As a result, the company is able to offer a range of financial services to creators. From a credit card specifically for video-makers to tax preparation services. At the same time, the company is betting that its tailored offerings will give it a competitive edge over traditional financial institutions.
Final Words:
To date, the company has raised a whopping $26 million in equity and debt capital. This includes an $11 million investment from the founders’ previous venture Lucky Capital, as well as an impressive roster of investors, including former TikTok CEO Kevin Mayer and YouTube co-founder Steven Chen. Meanwhile, the company is also making moves into the retail space, with the acquisition of a handful of popular online fashion brands such as h&m, H&M, and Uniqlo. But it’s the company’s ability to tap into the creator marketing universe that has garnered it the attention of many.
