Fintech Startup ‘Karat’ Raises $4.6 Million To Launch Credit Card Exclusively For Digital Creators

The startup Karat — which was co-founded by an Instagram alum and counts the co-founder of Twitch as an investor — is looking to provide an upscale credit card specifically targeting online creators.

The San Francisco-based company — which was showcased at Y-Combinator‘s most recent Demo Day — is the brainchild of former Instagram Live product manager Eric Wei and VC Will Kim. The aim of its inaugural product, the Karat Black Card, is to aid high-income creators with a credit card uniquely suited to their needs. This is because banks don’t always understand the creator business model — which can include unpredictable monthly income and a variety of revenue streams — and thus prevents burgeoning creators from accessing capital, Karat says.

To this end, the Karat Black Card provides generous credit limits and customized rewards and perks, according to the company. To determine these limits and rewards, Karat uses an algorithm that considers both an applicant’s financial and social statistics, including reach, engagement, and recent earnings. Rewards are also customized for individual creators depending on their area of expertise — so a Twitch streamer could receive cashback on streaming equipment, Karat explains, while a makeup artist could receive cashback on beauty products.

An accompanying dashboard enables creators to track spending, and Wei tells Tubefilter that the company is building more tools for creators to analyze and manage their revenues according to category and brand partner.

Along with its launch today out of stealth, Karat announced a $4.6 million seed funding round. Backers include Twitch co-founder Kevin Lin and VC firms SignalFire, YCombinator, CRV, and Coatue.

Applications for the Karat card are available here. Though as of now now, the product is only open to creators with over 100,000 followers on a single platform — be it Twitch, TikTok, Instagram, YouTube, or Facebook. Prior its public launch today, Karat was being piloted by the likes of gamer TheRussianBadger, daily vlogger Nas Daily, and TierZoo, which analyzes animals through a gaming lens.

“Karat is the card I wish I had two years ago,” TheRussianBadger, who does not disclose his actual name, said in a statement. “Banks gave me laughably low credit, forced me to fax documents like the Mesozoic era, and treated me like I didn’t matter. Now I have the credit I need, the perks I want, and a fax machine that I can set on fire.”

In addition to the aforementioned perks, Karat notes it’s offering creators a one-time sign up bonus of $250 toward any future purchases on equipment or electronics, advances on sponsorship payments at zero cost, and custom cards that can be designed to express a creator’s logo or branding.