Popular Pays Raises $3M to Connect Brands and Social Media Stars
Popular Pays—a company that connects social media superstars with brands—sounds like a startup destined for Silicon Valley. But with a focus on revenue and growing smartly, Popular Pays has taken a uniquely Chicago-style approach to its business.
Popular Pays, which launched in 2013 by CEO Corbett Drummey, helps social media influencers and content creators earn money by working with brands on ad campaigns. The startup, a graduate of Y Combinator in 2015, has grown to 24 employees and was break even in Q4 last year, Drummey said.
But to help make more long-term decisions, Popular Pays decided to raise some outside capital. On Monday the startup announced it has raised a $5.2 million Series A, which included $3 million in new funding led by GoAhead VC with participation from Pallasite Ventures and Hyde Park Angels, in addition to $2 million it raised after graduating YC.
Popular Pays expects to add another dozen employees this year and remain break even throughout 2017, Drummy said.
“I guess that’s very Chicago of us. If we moved out to the Bay Area, we’d just be focused on losing more money,” Drummy joked.
But moving out to the Bay Area was a very real possibility for Popular Pays. After wrapping up with YC, investors were asking if they planned to relocate. But Drummy brought the team back to Chicago instead, where they’ve grown the company and found a strategic advantage of being in the Midwest.
“Chicago has a large amount of advertisers,” Drummy said. “A lot of our sales comes from agencies and brands in Chicago.”
Here’s how Popular Pays works: On the startup’s platform, brands send out “briefs” with what type of content they’re looking for—i.e. a photo or a video with a certain product. Social media influencers (people with roughly 100,000 followers on Instagram, for example) respond to the brief with their price and ideas for the post.
Once the brand and creator agree on the content and the price, the creator gets to work. The agreement could result in an Instagram or Twitter post, which the brand would use in its marketing efforts. But Popular Pays also connects brands to creators who make content beyond social media posts. Popular Pays has facilitated deals where content creators’ images are used in digital ads, restaurant menus, and even billboards.
Content creators earn an average of between $700 and 800 for a photo and social media post, or $350 for a photo and $1,000 video if no post is required, Drummey said. Over 2,600 creators have been paid through the Popular Pays platform.
Popular Pays has worked with companies such as Bose Headphones, as well as agencies like Havas Chicago, who uses Popular Pays with multiple brand clients.
While a startup working with social media influencers would seem better suited for the coasts, Popular Pays says Chicago’s proximity to ad agencies and big brands, plus the cost of living, has made it the ideal headquarters.
“We wouldn’t have a hope of breaking even in the Bay Area,” Drummey said.
Read more at Chicago Inno