In 2020 and 2021, creator-focused startups found funding easy in many sectors.

Since the second half of 2022, venture capital investment in this category has slowed significantly, dropping from 42 rounds worth $336 million in Q2 2022 to only 19 rounds worth $110.2 million in Q3.

When the market is not favorable, hyped sectors often deflate. It becomes even worse if you are in a category dependent on a volatile advertising market. However, the creator economy’s rise was largely driven by temporary factors.

COVID and the boom in e-commerce (the primary advertiser of the creator economy) have fueled the growth in the creator space.

The people have mostly returned to their usual lives, and e-commerce has slowed down, so it’s not surprising that the creator space has slowed down, Coventure partner Brian Harwitt told TechCrunch+.

The fact that startups are having trouble raising money and possibly expanding is unsurprising. Still, it certainly means that new startups hoping to solve problems for creators and help them generate revenue are facing difficulties today.

A venture round and the development of young startups are only a part of the picture.

It is important to note that several outliers among the companies raised a lot of money before the ad market cooled off, including OnlyFans. Currently, it is one of the best companies in the field.