The Business Times

SoftBank-backed Jellysmack bets millions on Asia’s next influencers

Published Tue, Oct 25, 2022 · 08:40 AM

SOFTBANK Group-backed Jellysmack, which helps content creators become YouTube and TikTok stars, is launching a spending spree for growth in Asia, following staff cuts earlier this year.

The New York-based startup, formally known as Keli Network, said it’s partnering with Kuala Lumpur-based WebTVAsia to invest US$30 million in up-and-coming influencers, most of whom are on the media giant’s roster. That money is part of a US$500 million package Jellysmack has earmarked to fund social media personalities as it bets on their long-term growth.

Jellysmack’s financing differs from creator funds set up by Alphabet and Meta Platforms, which pay for videos that capture viewers. Jellysmack provides cash upfront - based on creators’ existing and projected future work, allowing them to spend money on production equipment or marketing - in exchange for a cut of revenues.

Another startup that provides creators upfront money is Los Angeles-based Spotter, which has advanced US$600 million in exchange for exclusive licencing rights to creators’ YouTube back catalogues and ad revenue.

Among Jellysmack’s roster are the world’s biggest YouTuber Felix Kjellberg, better known as PewDiePie; Nas Daily’s Arab-Israeli YouTuber Nuseir Yassin; and Nigerian-American influencer Jackie Aina, who advocates for diversity in the cosmetics industry.

Jellysmack plans to deploy the US$30 million over six months to help creators become “the MrBeast of Asia”, said Ezechiel Ritchie, Jellysmack’s general manager in the Asia-Pacific region, referring to the American personality.

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“There’s a market for it; there’s a need,” Ritchie told Bloomberg News in an interview. “It’s very difficult for traditional creators or big YouTubers to go to a bank and get a loan.”

Dubbed “a 21st-century-style creator collective” by SoftBank founder Masayoshi Son last year, Jellysmack uses machine learning to help influencers and brands monetise their work on platforms like Meta’s Instagram and Alphabet’s YouTube, taking an undisclosed share of ad revenue.

As with many of SoftBank’s big bets in the ride-hailing and e-commerce sectors, Jellysmack also had to cut costs amid a global tech slump, laying off 8 per cent of its staff six months ago as it pulled back on projects related to the crypto sector. But the US$100 billion creator economy has continued to balloon, fuelled by the rise of short-form video and by aspiring artists who remain displaced by the pandemic.

When SoftBank invested in Jellysmack last year, venture capital-backed creator economy companies attracted funding worth US$939 million, double the previous year’s, according to Crunchbase data. Jellysmack declined to disclose details of SoftBank’s investment but said the money catapulted it among the ranks of unicorns with a valuation of US$1 billion or more. It had a roster of 200 clients then.

Jellysmack says it has so far paid out more than US$175 million in revenues to creators since 2019, and that it now has 500 creators on contract.

WebTVAsia, which competes with Uuum of Japan, is hoping Jellysmack will help it generate more revenue from its 3,500 creators around Asia.

Monetising video and other intellectual assets remains a challenge in developing markets like Vietnam, where ad revenue from social media platforms tends to be much lower than in advanced economies, WebTVAsia founder Fred Chong said in an interview.

“We see Asian creators as undervalued” compared with markets like the US, Chong said. WebTVAsia hopes to forge a long-term partnership with Jellysmack and tap its expertise in editing content for multiple platforms and in using machine learning to discover new talent and monetise content, he said. “This is phase one of this partnership.” BLOOMBERG

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