Meet XPO: Fintech Startup Building A Better Bank For Creators
The last decade has seen a significant increase in the number of creators working with companies to produce content and market products and services to their audience. What initially started as people creating content for social media is now a $13.8bn industry projected to grow at more than 35% per year according to Statista over the next 3 years. In spite of this growth many traditional institutions struggle to understand and work with these creators. One industry in particular that has struggled to understand this market is banking. Many creators are effectively running small businesses and earning significant income however many banks do not see them this way and therefore do not build the tools and services they need. A recently launched startup that has noticed the problem first hand and is building a bank for creators is XPO.
Lotanna Ezeike, one of the founders of XPO studied economics at university and growing up was a very successful 200m sprinter. Due to his success on the track and posting training videos of his progress on social media he started getting contacted by brands such as New Balance and Puma who would offer to sponsor his posts and give him free training equipment if he tagged them. This was his first introduction to being a creator and understanding the influence they can have. The years that followed saw him complete a degree in Economics and work at Barclays as a digital specialist in a team where he managed a group of people working on the digital adoption of the brand amongst consumers in branch and those using the app.
Lotanna knew that more could be done to make the process of being a creator. A problem which constantly came up was creators not trusting companies and companies in turn not trusting creators. Lotanna discussed this problem with a friend Tomi Aiyeola who had previously set up an events business where he would work with creators. Seeing both sides of the spectrum the duo thought a good way to understand the industry further would be to build a marketplace connecting companies and creators.
The duo hacked together a basic app teaching themselves basic code and working with freelancers then launched the marketplace in September 2019. A year after launching, bringing on CTO, Ahmad Karkouti to develop the site further and growing the customer base they quickly realised one of the biggest problems creators faced was getting paid on time. They realised this, in part, because they had an escrow option on their app which would allow the creators to have visibility over their payment and many other marketplaces did not provide this feature. At this point they decided they would focus on making managing the financial side of being a creator easier their mission.
Launching a Bank For Creators
The first step they took in achieving their mission was fixing the problem they encountered ,helping creators get paid sooner. They were able to underwrite the funding of the invoices. In the early months they were gaining traction working with creators and charging them 10% to get their invoices paid out sooner. At this point the business was growing 30% month on month but the team noticed the invoices were between £500 – £1k which meant the influencers they were working with were not submitting their largest invoices. They decided to run a test and not charge creators to get invoices paid early for one day and immediately noticed many creators submitting invoices in the £5-10k range.
Seeing the demand if they could offer alternative services for creators they had a much clearer view on what their vision would be. They realised the value in the business would be the data they could utilise to better serve creators.
The team have since laid out a plan that involves starting with invoice financing for free and then using the data gathered to help creators get better at their role and give them accurate data on how much they could earn as well as practical tips on how they could do this. Additional steps in the business lifecycle will include helping them with compliance, sorting out things such as accounting, taxes and legal work. The final step will be offering a fully fledged banking service where creators are able to have a full suite of services designed for them by people who understand what their needs are.
The team have recently raised $1m from Blue Wire Capital who are also investors in neobank Monzo and the latest iteration of their app is live on the app store. It is clear that the creator economy is going to expand over the coming years and the XPO team’s organic understanding and business acumen at their young age will mean they are well equipped to understand and tackle this problem.
This article is part of a series featuring diverse people making a difference. To submit ideas for features or keep up to date with new releases you can find me on Twitter – @TommyPF91