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The Startups Taking on Creator Taxes; OnlyFans’ SPAC Plans

The April 18 tax deadline could mean a last-minute scurry by creators to upload dozens of payment forms from brand sponsorships and advertising payouts from social media apps. About five startups in our Creator Economy Database—including FlyFin, Lili, Collective, KeeperTax and Catch—address the particular challenges facing online creators by selling software customized for them and other freelancers. Here’s a look at two. 

FlyFin. The San Jose, Calif.-based startup uses artificial intelligence-powered software to scan users’ expenses and lists tax deductions that apply to them based on what their profession is. 

The 50-person startup, which was founded in 2020, benefited from the boom in the creator economy during the pandemic. It now has more than 100,000 users and employs 12 certified public accounts to assist in tax preparation and filing. It makes money by charging a subscription fee, which ranges from $7 per month to $29 per month. The more expensive version includes access to Zoom sessions with a designated CPA. 

Lili. The New York-based startup was founded in 2018 and has more than 550,000 users, which include both free and paying customers. These use the app for banking, making payments, invoicing, tracking income and expenses and taxes. 

Lili’s co-founder and CEO Lilac Bar David told The Information that the startup has found freelancers use seven different tools on average to handle finances. 

“A lot of people underestimate how complicated it is to start a business and to become a business owner. It's not just about making a difference in social media or developing your own voice and so on,” she said. 

About 65% of Lili’s users consider themselves full-time freelancers, according to David. Lili offers a free version and a premium one for $4.99 per month, which offers cashback rewards on cards and better expense tracking than the free version, among other things.

These startups are competing with the heavyweights of tax software. Intuit-owned TurboTax provides an integration with Intuit's Quickbooks to track expenses. The two offer a bundle offer for $25 per month or $35 per month. The higher subscription includes a final review by a CPA. 

The Takeaway: For many creators, this tax reporting season is their first when they will report meaningful income from their online careers. That will test the cluster of creator startups that have tailored products to individual entrepreneurs. 

Here’s what else is going on…

OnlyFans’ SPAC Plans

OnlyFans has been in talks with special purpose acquisition companies, or SPACs, about a merger to take the subscription platform for sexually explicit performers and others public, Axios reported, citing sources familiar with the matter. However, talks have stalled with one, a company led by former Disney execs Kevin Mayer and Tom Staggs.  

An OnlyFans SPAC listing would shed new light on how the waning of pandemic restrictions in countries like the U.S. has affected companies that flourished during the shutdowns. Unlike electric vehicle companies or space satellite companies that went public via SPAC, OnlyFans has been generating plenty of revenue: some $400 million in 2020, according to Bloomberg and it was projecting $1.2 billion in 2021, according to Axios. But we don’t know much about how the business fared recently. Because of that, a SPAC filing would be interesting reading indeed. 

📈 Big Number: $30 million

That’s how much Jake Paul, Vine creator-turned-boxer, is offering Will Smith and Chris Rock to fight in a boxing broadcast after Smith slapped Rock on stage during the Oscars ceremony on Sunday. Paul has offered them both $15 million each to step in a boxing ring to settle their differences in August. 

Deals & Debuts

See The Information’s Creator Economy Database for an exclusive list of private companies and their investors.

Classplus, an India-based startup that helps teachers and creators sell courses to students, raised a $70 million Series D round co-led by Alpha Wave Global and Tiger Global Management at a $570 million valuation. 

TikTok announced a new feature which will allow creators to use clips of their shows, GIFs, memes and other content through GIPHY, which was bought by Facebook-parent Meta Platforms for $400 million in May 2020, within the app. 

Spotify is testing a feature which will leverage technology from podcast discovery platform Podz, which it acquired last summer for around $49.4 million, according to an SEC filing. TechCrunch reported on the test. 

🏃People On The Move

Gopal Bhat, the former chief innovation officer at Rakuten, has joined Spring, a startup that allows creators to customize and sell merchandise, as its new chief technology officer. 

What We’re Reading And Watching

• TikTok’s Black Box Obscures Its Role in Russia’s War (Wired)

• Teen Girls Are Still Getting TikTok-Related Tics (Wall Street Journal)

Mahira Dayal is a reporter at The Information based in New York City. Contact her about startups and creators at [email protected] or follow her on Twitter at @mahiradayal.
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