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June 26, 2020 06:07 pm

A New Card Ties Your Credit To Your Social Media Stats

Founded by Instagram and finance alums, Karat wants to be the black card in every influencer's wallet. From a report: Spencer Donnelly, who goes by TheRussianBadger on YouTube, has cultivated an audience of nearly 2.7 million subscribers for his gaming videos. For years, business has been rosy. YouTube shares a percentage of the ad revenue on each of his videos, and the money is good enough that playing videogames on camera has become a full-time job. A few years ago, he even incorporated The Russian Badger, legitimizing his YouTubing business. The only problem: No bank would give him a serious credit card. "Imagine that you're making $2 or $3 million a year and they're capping you at $20,000 a month," says Donnelly, which was the best he could get from a traditional bank. Donnelly, like many of the creators who make their living on platforms like YouTube, Instagram, and Twitch, has long felt shunned by institutions that don't understand that his lifestyle is also his business. That makes him the target market for Karat, a new startup offering financial services to the influencer set. Karat's first product is the Karat Black Card, designed specifically for influencers, with credit lines starting at $50,000. Its perks can be customized (gamers get cash back on streaming services; beauty influencers get perks for product purchases), and the credit limits are determined by an influencer's social metrics, revenue streams, and cash in hand. To issue the cards, Karat has partnered with the payments company Stripe, which launched its own corporate card late last year. For now, Karat wants to be the flashy card in every influencer's wallet. But eventually, the startup could become a one-stop shop for a creator's business needs. Before its official launch, Karat piloted the black card with a small group of successful creators like Donnelly, many with similar stories of financial frustration.

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