Deal to Watch: A Digital Video Content Marketplace

$3M

Key Stats: Curastory on Wefunder

Valuation Cap

$3M

Amount Raised

$9,920

Number of Investors

22

Minimum Raise

$50,000

Maximum Raise

$300,000

Likelihood of Max Unlikely
Start Date

02/20/2020

Stop Date

05/15/2020

Days Remaining

45

Security Type

SAFE

Investment Minimum

$100

Deal Analytics

Click Here

Summary

 

This is a Knight Contributor piece, meaning it was written by a member of the KingsCrowd community. The opinions below do not reflect KingsCrowd, rather they represent that of the contributor.

 

Curastory has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

The Problem

Curastory is a company created to allow influential creators like Kevin Love or Emmitt Smith to monetize and distribute their own media. As athletes and celebrities talk about issues that are very close to them, such as concussions or mental health, they have had no way to control the money made from their content. Traditional media companies have scooped up the content unfairly to generate revenues, which are primarily derived from digital advertising. 

The Solution

Curastory alleviates the problems facing influential celebrities to create, own, and monetize their own content, thus preventing the traditional publishers from profiting unnecessarily. It provides a connected, seamless marketplace between the content producer and the media buyer. 

Here is how the platform works: initially, a creator uploads video content for a listing. Then, a brand marketing executive browses appropriately tagged video content listings, after which they bid on a listing they like. The platform absorbs the brand logo of the bid-winning brand and posts through the marketplace to the buyer’s channels on platforms such as YouTube, Instagram TV, and/or Facebook Watch. Curastory then tracks the attribution, and the content marketing buyers stress less about calculating attribution of video content campaigns.

In the words of a potential user, Curastory “will help me to scale, connecting great content ideas with more potential partners who understand the benefit of associating their brand with socially conscious messaging.” 

The big opportunity for Curastory is that, per the NCAA announcement last October, starting in 2021 NCAA student athletes have been added to the mix of content monetization, to which Curastory would have exclusive access, if the content is posted on their site. This new market opportunity is worth $1.1 billion. Additionally, all content creators can use Curastory to have freedom of monetization for their individual stories, rather than having their stories told for them. 

Curastory management confirms that there are no legal ramifications for NBA/NFL players under contract choosing to publish their content on their platform. They state that under the collective bargaining agreement (CBA) for each league (NBA, NFL, etc.), the media portion only mentions that athletes have to make themselves available. For example, the Cavs/NBA only have rights over game and highlight content,  not Kevin Love’s individual video content. Therefore, after games, Curastory is planning for a world where when a question is asked to players like Kevin or NCAA student athletes, they would respond, “I will be conducting a press conference on my Instagram tonight” and have that monetized through the marketplace before posting. This maneuver is not a violation of the CBA because the athlete made themselves available by making the above statement to the media. 

Market

Curastory can be categorized in the digital content creation industry. A report published by Transparency Market Research, reveals that this market was valued at US $9,336 million in 2016 and is projected to increase at a compounded annual growth rate of 16.8% from 2018 to 2026, reaching approximately $43,000 million by the end of the forecast period. In 2016, North America was the largest contributor in terms of revenue to the digital content creation market, due to strong technological advancement and considerable application of content creation tools in several end-users such as retail and government sectors across the region. The report notes that “increasing emphasis of enterprises on digital advertising is driving the global digital content creation market.

 

Some of the factors driving growth of digital media include significant investments by corporations on digital marketing, who in turn produce relevant and engaging customer content. Additionally, individuals are spending a considerable amount of time on social media and are sharing digital content in the form of memes, GIFs, images, and videos. Hence, this content has now become a means of communication. Additionally, the growth of the digital content creation market is mainly driven by the growing demand for brand promotions and advertisement.

Management

Tiffany Kelly is the CEO of Curastory. She was formerly the Sports Analytics associate of ESPN for about two years. She is supported by D’Bria Bradshaw as the Director of Business Affairs, and Austin Schiffer, the Lead User Experience Designer. 

There is a need to hire qualified personnel to develop the platform and have a strong advisory panel. The funds raised would be used for this goal. 

Why We Like it

We like Curastory because of their expansion plans and aggressive advertising plans, which are explained below.

Expansion Plans: As per Curastory, “In 5 years, Curastory hopes to be and is currently growing by 500 creators each year by accepting athletes, musicians, comedians, on-camera personalities, influencers, filmmakers, actors, and other general everyday creators into our marketplace.” They also project to have over $20 million in gross merchandise value month over month by 2024 with an 85% user retention rate, where retention is a buyer bidding on 1 content listing within a 12-month period. There is also a plan for exit in year three, but they must gain significant revenue to attract potential acquirers.

Aggressive Advertising: The main market adoption channels that Curastory is using to scale and grow are word of mouth/referrals, sales, email marketing, engineering as marketing, content marketing, and marketplace network effects. Tiffany states, “We have already tested that word of mouth converts to leads for both our marketplace supply and demand. For engineering as marketing, we are putting out articles ranked in SEO specifically on seeing our technology in action. For example, digital creators can input some information to see how our video monetization stacks up to other platforms (i.e. YouTube). This goes live in a few weeks.”

We are also impressed with them because they have the advantage of being first to market for transaction-based content monetization, ease of use, quality content, buyer verification, etc. 

The Rating: Deal To Watch

After careful consideration, Curastory has been rated a “Deal To Watch”. Their model, though effective, is largely unproven, the current influencers are mainly athletes, and they are heavily reliant on the future access to the NCAA student athletes’ content. This is a high-risk high return opportunity, which could pay off if managed well, and their phases of growth play out meticulously. 

Some of the competitors of Curastory are influencer marketplaces that allow creators to monetize from brands, like Greenfly, Opendorse, or INFLCR. However, these companies eliminate the media storyline and only focus on the product advertisement in the content. It is important to note however that Greenfly is profitable and had revenues of $1.5 million in 2019 (Owler), while Curastory is in the pre-seed stage and doesn’t have revenues. 

Curastory differentiates themselves by moving closer to authentic storylines that creators’ followers will be tuned in to, because they calculate projected engagement. The current risk of their business is low barrier to entry. Their product is not patented at this moment and if the competition, like Greenfly, decides to offer the same storyline bidding product, they may struggle to compete. As per the Curastory‘s CEO, patents will be submitted for video matchmaking technology, projected engagements technology, and video tracking technology.

Taking a glance at the financials, the company is at a pre-revenue stage and has negative net-income. Their revenues come from 10% of the marketplace transaction and a listing fee, which is on average $900. The valuation of $6 million is over-optimistic and is derived from the assumptions that the company would be acquiring 5% market share by 2024, while projecting $270 million revenue in that time period. 

The current numbers claiming growth of 50% month over month is not significant yet, as they have only 250 sign-ups and there are about 15 athlete and on-camera personality digital creators, mostly acquired due to management’s personal connections in the industry. The growth is dependent on the strategy for acquiring new customers, for which management seems to have a good plan in place. 

In the first year they will use word of mouth, non-paid advertising channels, content marketing ranked in SEO, as well as utilizing a few well-known athletes and on-camera personalities who will be using the platform to create buzz. In year 2, the company will move to paid advertising channels like monetizing videos in their own marketplace, instead of Facebook/Google and out of home.

In summary, Curastory has high growth potential with the ability to scale and a differentiated product. At the same time, an investor has to weigh the risk associated with competition, assumptions of continued growth in user-generated content, and lack of current Minimum Viable Product (MVP).  

Invest Today
3
About: Rudy banerjee

Experienced Senior Analyst with a demonstrated history of working in the investment management industry. Skilled in Sell Side, Securities, Mutual Funds, Trading, and Hedge Funds. Strong business development professional with a Master of Business Administration - MBA focused in Corporate Finance / Business Analytics from Georgia Institute of Technology.

View Rudy banerjee's deals

This is a Kingscrowd Crowd Article

Gain access to the best rated startups across all major platforms including Wefunder, Republic, StartEngine, SeedInvest, Netcapital and more...