This startup wants to help creators tap the $300B+ social commerce industry

Fourthwall recently announced it raised $17 million for its platform that helps creators tap the rapidly growing social commerce industry.

The news: Fourthwall nabbed $17 million in funding from investors including Lightspeed Venture Partners, Initialized Capital, and Alexis Ohanian's Seven Seven Six. The company joins a chorus of firms — ranging from Mighty Networks to Koji — vying to serve the $100 billion creator economy and blossoming social commerce industry, which is selling products directly on social media.

Fourthwall 101: Based in Los Angeles, Fourthwall offers creators tools to launch their own website, open a shop, and provide memberships to their fans. With a goal to become the creator economy’s “all-in-one” platform, Fourthwall offers many website builder basics, membership management, and engagement tools like personalized audio or video thank you notes. The company, founded in 2019, also allows creators to brand and sell 200+ products like sweatshirts, hats, backpacks, posters, and mugs, as well as digital products like PDFs or ebooks.

Prices, ownership: Creators own their domain, branding, and data. There’s no fee to join, however, the company takes a 5% cut of creators’ earnings, charges a credit card processing fee of 2.9% plus $0.30 on all transactions. Fourthwall also takes a 3% cut on the sales of digital products.

Growth: Forthwall reported that in 2021 the number of creators using its platform grew 10x and that multiple of its users have already made more than 1 million. The company didn’t offer any specifics on total users numbers.

Why it matters: Social commerce is expected to grow about 36% this year to reach $36.6 billion in the U.S., according to market-research firm eMarketer. In China, social commerce is already extremely popular and inked $352 billion in 2020. That’s about 10x larger than the U.S.

“U.S. marketers can look to China as a roadmap for social commerce’s development as many of the trends that will drive its growth, like live stream shopping, originated in China. Keep in mind, however, that it’s not an apples-to-apples comparison. The social and e-commerce landscapes in the US are far more fragmented than those in China, and consumer behavior and attitudes toward digital shopping, social media consumption, online privacy, and payments are different as well.” —Jasmine Enberg, eMarketer senior analyst at Insider Intelligence

What’s driving social commerce: The pandemic has certainly helped boost social commerce, but Smart Insights offers a few more theories. Social media is well-targeted, as users seek out specific people, activities, and brands. Social commerce is also relatively simple for customers: They get excited by a creator and buy on the same platform.

YouTube wants a slice: The world’s largest video platform wants to boost the United States’ live-shopping and social commerce spending. YouTube launched Holiday Steam and Shop, a series of live streams featuring celebrities hawking products. The Alphabet-owned company announced in July a new feature that makes video ads more “shoppable” by adding browsable product images beneath the ad.

Pinterest too: The visual discover platform Pinterest also is aiming to capitalize on the growth of live shopping. Pinterest launched Pinterest TV to offer creators the ability to host live shopping shows on the visual discovery platform.

Jawdropping: The Hustle reported that in October a Chinese internet star known as “The Lipstick King” sold $1.7 billion during a 12-hour live stream. 😦

Funding keeps flowing: In July, we dove into a CB Insight report that noted creator economy startups were on track to ink about $2 billion in venture capital in 2021. Welp, that’ll be wrong. The Information reports that so far creator economy startups have raised more than $3.7 billion from investors this year.