Fintech Karat to Offer Customized Credit Cards for Digital Content Creators, After Securing $4.6 Million in Seed Funding

San Francisco-based Karat, a company founded by an Instagram alum and backed by the co-founder of Twitch, is reportedly planning to offer a new credit card for upscale clients who are focused on creating digital content.

The Silicon Valley firm’s management attended the recent Y-Combinator Demo Day where they showcased the products they are planning to launch.

Eric Wei, a co-founder of Karat, previously worked as product manager at Instagram Live.

Karat’s main product, the Karat Black Card, is designed for high-income online content creators. The company said the credit card would be developed specifically for their needs.

Karat’s founders claim that traditional banks don’t always develop products that are well-suited for the creator business model. Online creators are mostly self-employed, which means that there can be periods during the year when their monthly income may not be steady. They also depend on several different revenue streams, which can make it challenging for them to gain access to financing or other flexible financial services from their regular bank.

The Karat Black Card aims to offer generous or more flexible credit limits and also intends to provide customized rewards and benefits. Karat explains that it uses a special algorithm that determines and assesses an applicant’s financial and social stats.

The algorithm reportedly takes into account their overall social media reach, engagement, and recently reported earnings. The card is able to customize rewards for individual digital content creators depending on their specific requirements and area of expertise.

For instance, a Twitch streamer might be able to get cashback offers on streaming equipment, Karat’s management noted.  Meanwhile, a makeup professional could benefit from cashback deals on beauty and skincare supplies.

Wei told Tubefilter that Karat offers a dashboard that allows online creators to keep track of their spending. The Fintech firm is also developing more software solutions for digital creators to better manage their revenue streams.

Karat officially launched on June 25, 2020. The company also confirmed that it will receive $4.6 million in seed funding (in total) from Twitch co-founder Kevin Lin, and several venture capital firms including Coatue, CRV, SignalFire, and YCombinator.

Applications for Karat credit cards can be accessed here. However, they’re only available to digital creators with more than 100,000 followers on a single platform, which can be Facebook, YouTube, Twitch, or TikTok.

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