FilmHedge Secures Funding from SCAD to Build the Dun & Bradstreet of Media Finance
SAVANNAH, GA — Atlanta based fin-tech company FilmHedge has kicked off its $5 Million Seed round with investment from Savannah College of Art and Design’s SCADpro Fund.
FilmHedge is a fin-tech and data company started in February 2020. The company used a previous $2M Pre-Seed round to build two products: a marketplace for investors and a database of financial data. Previous investors in the company include WOCStar and Osparna Ventures.
For institutional financial partners (Banks, Hedge Funds, Family Offices, Private Equity firms etc.), the FH Marketplace automates syndication of secured, short-term, high-yield lending opportunities to Film & TV producers.
FilmHedge gives these investment partners the opportunity to earn passive income from media lending. Partners set their terms, their risk tolerance, target earnings, and place capital with FilmHedge. The company then aligns lending opportunities that match their terms. This eliminates a lot of the work and perceived risk that has kept some skeptical of media as a reliable asset class.
FilmHedge borrowers are Film and TV producers who are backed by major Hollywood studios and distribution companies (e.g. Netflix). Through the marketplace, these borrowers can apply for bridge loans, gap loans, or last-money funding (known to the industry as finishing funds).
The company has collected more than $30M in lending opportunities month over month since May 2021.
BEFORE AND AFTER
The startup’s newest product is FH Credit, a data product that centralizes historical financial information about Film and TV Producers. The platform highlights information that other financial groups can use to improve their own investment decisions.
“This means even where FilmHedge isn’t the lender, the data we collect and provide is still useful to other financial groups,” Jon Gosier, the CEO of FilmHedge, explained.
“Much like business credit tracking organization Dun & Bradstreet, we’re the third-party who gives borrowers the tools to share whatever financial data they choose. Information like credit ranking (proprietary ratings the company created related to media financing) and past financial track record,” Jon said.
“One of the big problems affecting Producers trying to get movies or TV shows made is potential investors don’t know who to trust with their money. There’s no central place for them to access verified information. With FH Credit, we aim to change that.”
Popular sites like IMDB (the Internet Movie Database) allow users to look up a film’s box office earnings after release. FH Credit offers the financial before picture, to help Producers get funded in the first place.
The data is based on financial transactions and data pulled from bank accounts — offering a deeper dive into the true financial state of any individual project, its Producers, and related spending.
Jon continued, “We’ve already begun to collect millions of data points….financial data that doesn’t currently exist anywhere else in the Film industry.”
FULL CIRCLE
The SCADpro Fund invests in new ventures by SCAD alumni, helping them scale fast and solve business challenges through innovation by design. Supported by the resources of SCADpro Fund, alumni entrepreneurs build valuable businesses that compete on an international scale, while nurturing their home communities and creating new internship and job opportunities for SCAD students.
The investment from SCAD is full-circle for Jon who attended Savannah College of Art and Design as an Undergrad in 1999. While attending, he studied the Film-related discipline of Sound Design. It was this education that eventually helped him land a job as a Music Supervisor for Tyler Perry Studios at its launch in 2006.
The prestigious art school was founded in 1978 to provide college degree programs not previously available in southeast Georgia and attracts students from throughout the United States and abroad. SCAD today has many deep connections in the entertainment industry with alumni graduating to work at places like Pixar, Marvel and Disney.
Although Jon eventually transferred to another school to study business, he credits SCAD with the foundation of his career.
“In film school they teach you everything about how to make films except how to finance them. I became fascinated with the finance part,” Jon said.
The school primed his desire to later focus on building tech companies that target media. Previously, he co-founded Warner Media-backed music data company Audigent which now employs more than 100 people. Prior to that, he founded MetaLayer, a big-data company backed by Comcast Ventures in 2011.
SCADpro Fund managing director, Ray Crowell, expressed, “Investing in Jon and the team [at FilmHedge] was a no brainer. He’s a proven entrepreneur and investor, a true film finance pioneer, and a TED thought provoker. When we think about creative leader role models for students to emulate, look no further than Jon.”
USING FINTECH TO BRIDGE THE FINANCE GAP
Jon believes FilmHedge is addressing a major blind spot for Film & TV investors who often have no way of evaluating Producers seeking capital and limited ways of conducting due diligence.
“By solving the problem of efficiency, trust, and transparency on the investor side, we are making it easier for filmmakers to get the outcome they want on their side — which is more access to capital.”
The idea for FilmHedge arose when Jon was a private investor financing movies. There were few resources available to evaluate whether a deal was good or not, and likewise the filmmakers had few ways of knowing if the investment terms were good for them.
“Every other industry — real estate, art, the stock market…even crypto — has products that make transactions more efficient: products for allocating capital, for making the right investment, for monitoring performance, and for benchmarking industry-wide financials. I noticed that pretty much all of this was missing from media,” Jon said.
Mickey Vetter, who led a successful career in private equity before joining the startup as Co-Founder and Chief Growth Officer continued, “At FilmHedge, we’re building tools for an industry known for being both hard to understand and hard to access.”
“Our mission is to build a new financial operating system for Hollywood, one driven by data.”
Visit the company at http://filmhedge.com and follow us on Twitter @FilmHedge.
