As entertainers grow their following and command higher fees, they start looking for ways to creatively channel their money in a way that affords them more opportunities for maintaining and growing their wealth. In a bid to diversify their income generation, some of Hollywood’s biggest names are venturing into the business world as investors, business owners, or entrepreneurs. They’re not picky about the kinds of businesses they enter into either.
Jessica Alba started Honest Company in 2011 to manufacture “clean” baby products, and the company has since expanded its product catalogue. Kanye West, who owns apparel and sneaker brand, Yeezy, was the highest paid hip-hop artist of 2019, banking $150 million, most of which was from Yeezy. Jared Leto and Snoop Dogg are both invested in Reddit. Ashton Kutcher owns a venture capital firm with interests in the likes of Uber
The list of celebrities growing their financial portfolio outside of entertainment is endless, and it’s only going to keep growing. As every business and industry becomes more tech-dependent, one area that has been gaining massive attention from investors is fintech. This union between financial services and information technology is steadily killing off cash transactions as every business increasingly adopts Fintech solutions.
According to Eugene Johnson, founder of Revi, a restaurant-focused Web3.0 fintech solution, “A few decades ago, we were a cash society. There was a time people didn’t even trust digital payments. Today the trend has completely turned on its head. Now having a lot of cash is not only rare it’s irrelevant. Businesses now need to not only support card transactions but newer forms of digital pay like apple/google pay, biometric payments and, what we hope to introduce soon, paying with your identity and not needing to ever pull anything out of your pockets again. We are already seeing these alternate forms of payments in our Hollywood movies, it’s only a matter of time before these things become cultural norms.”
Johnson believes the world of fintech is just getting started and is headed towards another bold phase of evolution in payments that is already starting to see massive innovation by blockchain, AR, and VR technology, a trend that everyone, including Hollywood’s elite, has noticed and are capitalizing on already.
Fintech investment is heating up
There’s a growing belief that this new wave of fintech is going to engulf all industries to the point where no business would be able to exist without it. Following the growth of fintech in the last two decades, since the emergence of payment solutions like WorldPay and PayPal
Fintech has evolved rapidly, and today no relevant business can run without leveraging one fintech solution or the other. Fintech has taken numerous forms; Credit cards, digital payment facilitators like Stripe and Square, money transfer solutions like XE and Wise, online banks like Revolut, P2P lending platforms like SoFi, cryptocurrency, and blockchain, and digital assets like NFTs.
In 2019, the total value of fintech investments was $213.8 billion. It took a hit when the pandemic arrived, falling to $124.9 billion. In 2021, it rebounded to $210 billion and is expected to hit $305 billion by 2025.
Johnson believes that one of the biggest reasons fintech is appealing to celebrity investors is trust. In his words, “When payment platforms gained the trust that consumers and businesses originally had for cash transactions, they moved over to digital transactions with the advent of Web2.0.
“This version of the internet made people more comfortable using their real information to create personal profiles online. This brought trust to the profiles online and allowed for an e-commerce infrastructure to be built on top of it.”
“Today these personal profiles are starting to be extended to the physical environment. As this happens at scale, fintech growth will be explosive and no platform will be able to innovate without a fintech solution. Payments will become the gateway of all innovation. We still aren’t at the apex of innovation. There are so many more creative solutions left for fintech to create. But even with the innovation we have in today’s world so far, fintech solutions can do more than transact money.”
Revi is a technology solution for restaurants that uses an in-store digital and mobile ordering system to streamline the ordering process, gather analytics, and reconnect with users post-purchase.
The tech analyzes customer data to deliver a personalized and helpful post-purchase experience and has so far processed over $30 million in transactions. The system is on pace to process $30-$40 million this year.
Fintech has come to stay but Johnson is adamant that only fintech companies that prioritize consumer value will survive. “In today’s fintech space, brands need to build some differentiation in order to stand out. Fintech solutions have to be seamless, rewarding, personalized, and connected for the consumer, not just the business.”
Celebrities are putting more than just their money into fintech
In the not-too-distant past, celebrities were known to focus their investment on apparel, alcohol, restaurants, sneakers, and other sectors that followed trends. There was a sense that these were easier sectors to understand and promote using their celebrity status, regardless of whether they possessed expert knowledge or not.
With fintech, however, there’s a sense that more knowledge is needed to promote a financial solutions product. In fact, Justin Bieber, Snoop Dogg, Drake, Gwyneth Paltrow, Kate Hudson, and many other celebrities just put money into a new fintech company, MoonPay.
A-list celebrities often have a lot of available investment capital, but investing in Fintech is understandably not something that they have been known to invest in. This, however, doesn’t mean that there hasn’t been significant celebrity investment into Fintech. In fact, by 2015, celebrity investment in tech and fintech had already hit $2 billion. However, when it comes to fintech involvement, beyond mere cash injection, the picture is less clear.
Think of the judges for Apple TV’s “Planet of the Apps” show, a Shark Tank spin-off of sorts. Apart from seasoned entrepreneur and business commentator, Gary Vaynerchuk, the rest of the panel of judges consist of Jessica Alba, Gwyneth Paltrow, and Will.i.am, a list built up of those who had made their name in the entertainment space.
On the program, app makers pitched their app ideas to a panel of judges, and if their idea was deemed worthy, they would have a chance to be mentored by the judges to where they could gain funding for their business. The show has allowed us not just to assess the entrepreneurial acumen of these celebrities, but to see them mentor quite a few fintech companies as well.
Whatever you think of celebrities taking on direct roles in fintech, it doesn’t change the fact that celebrity investment is here to stay. The lines between Hollywood and Silicon Valley are blurring quickly and it doesn’t look like just another trend.