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Creator Economy: Funding Hits Four-Year High; Another TikTok Exec to Exit

Creator Economy
What's driving the rebound in creator startup funding. Plus, another top TikTok exec heads for the exit.͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­͏ ‌     ­
Apr 17, 2025

Creator Economy

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Welcome back!

Funding for U.S. creator economy startups is roaring back—with a caveat. Investors are making bigger bets on fewer companies, mirroring the broader funding environment for startups.

As we outlined in a story earlier today, U.S. creator economy startups raised more money in the first three months of the year than in any quarter since 2021, when investor excitement around the creator economy peaked. Funding for these U.S.-based companies jumped nearly 140% to $928 million during the first quarter compared to a year earlier, according to new data from The Information's Creator Economy Database.

A few factors are driving the increase, including gains in startups focused on AI, shopping and music. The growth of major platforms like YouTube—which has become the biggest streaming service on TV screens in the U.S. by time spent—as well as an increase in influencer marketing budgets from major advertisers such as Coca-Cola brands and Unilever, is giving startups a boost and investors more confidence. 

"We're entering a new growth cycle for the creator economy," said Chris Erwin, founder of Rockwater Industries, a mergers and strategy advisory firm focused on the creator economy and media. "General consumer time and dollars spent on digital and social platforms is really increasing, so that's driving a lot more revenue in the space. Capital follows revenue." 

The third-biggest investment of the quarter globally was a $180 million round in ElevenLabs, which sells AI voice cloning and dubbing services. By last fall, ElevenLabs was generating around $80 million in annual recurring revenue, according to a person familiar with its financials.

"In 2025, you see companies that actually have a track record, have been operating for several years and doing so profitably," said Benjamin Grubbs, a former YouTube executive who is the founder of Creator Sports Capital, and has been investing in the sector since 2018. 

In March, Grubbs' firm led a $45 million investment in Good Good Golf, a YouTube channel that has expanded into a golf media company that sells its own merchandise.

Gains in Music & AI

Funding for music startups totaled $240 million during the first quarter, though the lion's share was from a $200 million debt round for Duetti, a startup that buys song rights from independent artists. 

What's attracted investors to music startups? "The scale and the fact that it's very universal. It's part of every culture," said Geraldo Ramos, co-founder and CEO of Music AI, which developed a music-making tool for creators called Moises. Music AI announced $40 million in Series A funding led by Connect Ventures and Monashees in January. 

"It goes beyond the U.S. or a particular market," which makes it an attractive category for investors, Ramos said. 

AI startups in the U.S. raised about $128.6 million during the first quarter, up from just $10.5 million during the same period in 2024. 

Some AI companies in the creator economy are also finding an easier funding process. OpusClip, an AI video editing tool for creators, for example, didn't set out to raise funding during the period, according to co-founder Young Zhao. But after conversations with investors, the company decided to raise a $20 million extension, which was led by Softbank Vision Fund 2 in March.

"We've seen more and more AI products that are generating value and saving a significant amount of time," Zhao said. "Three years ago, most of the products were toys … Now many of them are really revenue and productivity engines."

Here's what else is going on…

As TikTok fights to stay alive in the U.S., it's seen a string of executive departures. We scooped the latest and arguably the most significant to date: Michael Beckerman, TikTok's U.S. public policy chief. By the end of the year, Beckerman told staff he will leave the role and move to a global advisory position.

Beckerman, who will also move to Charleston from Washington, has played a key role in the company's efforts to fight against a ban. His upcoming exit raises questions about whether TikTok will change its strategy to resolve U.S. government concerns over its Chinese ownership. 

CEO Shou Zi Chew is also losing one of his trusted direct reports. Beckerman sat directly behind the CEO when he testified on Capitol Hill for the first time in March 2023. 

Beckerman said he'd been discussing the move to Charleston, closer to his family, with Chew for more than nine months. 

"Over the coming months, I'll continue in my current role while leading the search for my successor to ensure a smooth transition," Beckerman wrote in a memo to staff. 

In other TikTok news:

• TikTok reorganized its global e-commerce team, giving more power to leaders from China and Singapore, Business Insider reported.

• The app is testing showing reviews for select places, such as restaurants, on the comments tab of a video, according to TechCrunch. Users who have access to the feature will see a new "reviews" tab after they click to view comments on a video. 

• TikTok and Major League Soccer renewed their "strategic partnership" with a multi-year agreement. As part of its previous deal, TikTok in October exclusively streamed a live feed of soccer star Lionel Messi during his debut MLS Cup Playoff match for Inter Miami CF.

A Google breakup is looking more likely. On Thursday, a Virginia court ruled that Google has violated antitrust law by "wilfully acquiring and maintaining monopoly power" for the sale of ads on independent websites across the internet. Read more here

Sheryl Sandberg, the former chief operating officer of Meta Platforms, testified in the company's antitrust trial on Thursday, saying digital advertising is a fiercely competitive market and consumers have lots of opportunities to skip ads or not engage with them. 

Revolve was hit with a $50-million class action lawsuit claiming that the clothing retailer's social media marketing tactics with influencers deceived consumers. 

Roblox was sued by Kelley Heyer, the creator of the viral TikTok dance based on Charli XCX's "Apple" song, alleging Roblox used it without permission. A Roblox spokesperson told The Information it "takes the protection of intellectual property very seriously and is committed to protecting intellectual property rights of independent developers and creators."

See The Information's Creator Economy Database for an exclusive list of private companies and their investors.

Instagram announced a new feature called Blend that allows users to create a custom Reels feed with friends in a direct message chat. For creators, Instagram said this will offer a new way for people to discover their Reels. 

Pinterest considered spending hundreds of millions on an acquisition to supercharge its ad sales earlier this year, The Information reported. The company, which hasn't made any significant acquisitions, contemplated buying one of five ad tech firms, which help marketers buy ads on websites. 

Kool-Aid and Nike partnered on a new sneaker inspired by a TikTok trend where users combined different packets of Kool-Aid powder to create their own flavors. 

Captiv8, an influencer marketing firm, launched virtual storefronts for creators and brands to sell products.

Capsule, a startup developing AI tools for video production for brands, raised $12 million in a Series A funding round led by Innovation Endeavors.

Arcana Labs, a startup creating AI video tools for film production, raised $5.5 million in seed funding led by Semcap AI. In February, the software was used to create a satirical version of Gaza with bearded dancers in bikinis and a golden statue of Donald Trump, which was later reposted on social media by the president. The video's creators at the time said they didn't mean to become a "propaganda machine" for Trump. 

Chris Matthews, the former MSNBC host, said he will revive his cable news program on newsletter publisher Substack.

Thank you for reading the Creator Economy Newsletter! I'd love your feedback, ideas and tips: kaya@theinformation.com

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About Creator Economy

Kaya Yurieff brings you everything you need to know about the booming creator economy, from the platforms to the people to the deals.

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