Yusuf Özdalga of QED Investors explains how to fund the creator economy

Episode 31 of the Influencer Marketing Lab podcast where Yusuf Özdalga of QED Investors explains how to fund the creator economy

The Influencer Marketing Lab podcast is sponsored by Tagger the data-driven influencer marketing platform and social listening tool.

Show notes

Welcome to episode 31 of the Influencer Marketing Lab - a weekly podcast tracking the growth spurts and growing pains of influencer marketing.

This week I'm in conversation with Yusuf Özdalga, partner at QED Investors a venture capital firm specialising in fintech.

Podcast episode highlights

In this episode we discuss:

• What creator banking is
• How embedded finance might enable any company or even any influencer to become a fintech provider
• Why Jack Dorsey's company Square might have acquired music streaming platform, Tidal
• Why QED Investors backed neo bank Current - the company which also counts Jimmy Donaldson aka MrBeast as both an investor and marketing collaborator
• We also talk about YouTuber CJ So Cool and his offering of shares of future royalties in exchange for immediate funding from investors. We ask whether this model might gather momentum within the industry.

Transcript extract

Scott Guthrie: QED Investors was an early backer of Current.  I know this wasn't your specific deal, but can you share a little bit about what attracted Current to QED and how they utilise influencers?

Yusuf Özdalga: Yeah, that's a great question. We really like Current; great investment. Frank Rotman, who you can also follow on Twitter as @FinTechJunkie did this investment with Stuart Sopp, their founder. And Current is great. It is in many ways a neo bank. But I think one thing that is really salient about what they do is how well they use influencers and how they kind of attract influencers and how they have a very symbiotic relationship with influencers. So if you go online, I think you can see a lot of Mr. Beast.

Scott Guthrie: Yeah Mr. Beast, aka Jimmy Donaldson, has both invested in and he's fronting sponsorship with Current.

Yusuf Özdalga: The interesting point here is that what we realised with Current is that in the future, if you're looking to grow a business, it could be a FinTech, it could be a neo bank, it could be a brand whatever you're doing, influencers will be a channel for you. And that needs to be managed. Current is a very good example of a company doing that very effectively, very consciously and very successfully.

I think a lot of other brands will come to this realisation. And as the brands come to this realisation, the sort of connectivity between those brands, and those influencers will be key. 

Scott Guthrie: Yeah, in terms of Current and Mr. Beast, I think that relationship highlights two themes within the creator economy.

Firstly, creators are increasingly diversifying away from being overly reliant on AdSense revenue or brand collaborations. And, you touched on that in an earlier answer Yusuf.

Also I think creators are looking to forge these long term relationships with brands, which blur the line between content provider and part owner of the brand. So it's really interesting space as we sort of move from the second phase of influencer and celebrity and online celebrity into this third phase, which is the creator economy.

Yusuf Özdalga: Correct, yeah, I think we're gonna see a big evolution here. I mean, as I alluded to earlier, just to see how much Twitter and Facebook have to change their offering in relation to all the new platforms, and all the new propositions coming up, gives us a sense of the future that this will be a very fast evolving space. And the good news is, the creators will be at the centre of it, and they should be the ones who win. And the people who serve them the best will be the ones who win by extension of that logic.

Scott Guthrie: Yusuf, you mentioned in an earlier answer David Bowie securitizing his songbook, I don't know if you saw that last week, CJ So Cool a YouTuber with 8.7 million subscribers who nets around 30 million views a month, was the first creator to offer shares or future royalties in exchange for immediate funding from investors.

He's asking investors to contribute a minimum of $850,000 cash to fund his future production efforts. And in return, he gives up 35% of his monthly YouTube earnings. Do you think we'll see more creators utilising those sorts of financial instruments?

Yusuf Özdalga: Absolutely. It's not surprising at all, if you continue the business analogy, then businesses need debt, they need payments, but they also need equity. So I think the fact that they would do equity fundraising is not a surprise at all. It's just a logical extension of this evolution.

We'll see even more of that we'll probably see platforms that offer those services, almost like a stock exchange in many ways. And I think the creator banks should be able to offer this.

Yusuf Özdalga biography

Yusuf Özdalga is a London-based Partner at QED Investors with a focus on European financial technology and consumer finance companies. Yusuf joined QED in 2017, and his career has spanned roles as an operator, advisor, entrepreneur and investor. His current portfolio of investments include Wagestream, Zopa, and GAIN Credit.

Yusuf started his career at Capital One in 1997 where he helped develop many of the innovative lending solutions in the underserved credit segment. Subsequently he joined the Financial Institutions M&A Group at JPMorgan, advising banks and specialty finance companies.

He started his professional investing career in 2006 as a Director of Principal Finance at Lehman Brothers, funding specialty finance and consumer credit companies in Europe, including early fintech plays such as some of the first online loan originators in Sweden. Prior to joining QED, Yusuf was an Investment Director with the growth private equity fund Eastgate Capital, helping emerging companies and entrepreneurs build lasting consumer franchises by leveraging the power of data analytics.

Yusuf holds an MBA from the University of Chicago Booth School of Business with High Honors, and a BS in Commerce from the University of Virginia McIntire School of Commerce with Distinction. He completed his undergraduate degree with a dual concentration in Finance and MIS.

Yusuf Özdalga is fluent in English, Swedish, and Turkish and has a working knowledge of German. He is currently studying Bosnian/Serbo-Croatian.

Useful links

• QED Investors website
• Yusuf Özdalga's blog
• Yusuf Özdalga Twitter
• Yusuf Özdalga LinkedIn
• 21st Century Lending
• YouTuber CJ So Cool Is Auctioning 35% Of His Future Royalties For At Least $850,000
• Dissecting a Bank and the Ghost of 2008
• Frank Rotman, QED Investors co-founder, Twitter