Cameo will be a Unicorn by 2020

If “selfies are the new autographs” how many John Hancocks does Cameo need to sell to reach a $1b valuation?

Amrit Singh
Jul 2, 2019 · 5 min read
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On Tuesday, Cameo announced it closed $50 million in a Series B round, which reportedly values the company at $300 million, post-money. Kleiner Perkins led the deal; Lightspeed Venture Partners, Bain Capital, and Spark Ventures participated. According to Crunchbase data, the round brings Cameo’s total venture backing to at least $65.2 million

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Cameo allows consumers to book celebrities to create personalized video shoutouts. These range from birthday and good luck messages to prom invitations, marriage proposals, baby gender reveals, job offers and pep talks.

Today, the shoutout options are pretty broad- Kareem Abdul-Jabbar, Troy Aikman, Stormy Daniels, Charlie Sheen, Jennifer Love Hewitt, Caitlyn Jenner, Kevin O’Leary aka “Mr. Wonderful” and 15,000 others.

Cameo takes a 25% cut of every transaction made on its website. The team has leaned into the micro-influencer segment, believing that a greater number of videos delivered through social media platforms will drive virality for the Cameo brand.

IMO, a Chris D’Elia shoutout should be worth at least $2,000

I’m bullish on this case (I’ll explain why below) and excited for where Cameo can grow. As Semil Shah notes, we’ve seen cases like this before — companies backed by high-quality investors with seemingly unreasonable valuations at Series B.

The celebrity and sports talent agency industry generates $10B in annual revenue and is very fragmented. This segment includes agents and managers who represent or manage creative and performing artists, sports figures, entertainers and public figures. Agents typically focus on finding work for a client and engage in contract negotiation and management for a client, for which they are entitled to a predetermined commission. Managers have a broader role that includes contract negotiation, finding sponsorships and endorsements and other services such as career advice and financial planning.

Using some early data points and comps, we can extrapolate what it will take for Cameo to hit the ol’ unicorn valuation.

According to Bessemer VP’s cloud index, public cloud companies (mostly SaaS) are trading for a 10x trailing enterprise value-revenue multiple. That is the average — the median falls at about 9x.

TechCrunch and Crunchbase share that Cameo had about 100,000 cumulative bookings at the beginning of Q1 2019. They’re now on track to reach 300,000 bookings by the end of this month. That’s an impressive scalar, representing approximately 1.75x quarterly growth.

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Taking a glance at Cameo’s featured list, ranked by ‘most responsive’ celebrities, we can conservatively estimate the ARPU at $65. In my forecasting, I also accounted for slowed growth, down to 20% increase quarter-over-quarter. Extrapolating this information to Q1 2021, we’re looking at a cool $135m gross, $34m net revenue annually. Discounting for the uncertainty of income (since Cameo is not a SaaS company) we still reach a $1B valuation less than 24 months from now.

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Of course, this simplification assumes a lot. It implies Cameo will stick to their current revenue model, will drive the same ARPU as they expand internationally, and won’t lower their take rate to invite additional celebrities.

Oh, The Places They’ll (Maybe) Go

Steven Galanis has stated Cameo will use the fresh capital to expand internationally. This is critical, but not the only way Cameo could continue growing. It would be cool to see Cameo experiment with creative, social strategies in order to drive new revenue streams:

Celebrities can do more than static video shoutouts — this includes live conversations, remote speaking events, Q&A sessions and more.

Given Cameo has aggregated a dedicated base of influencers, Cameo might become also become a platform to book broader influencer campaigns, competing with the likes of Upfluence.

I think Izea is pretty cool too —

This is the case for the tech-enabled talent agency. Potentially, Cameo could use this wedge as an opportunity to build offline relationships with celebrity talent. This might manifest in a few forms —

  1. Manage live events, speaking opportunities, and eventually professional gigs for celebrities.
  2. Cameo-Fest: Bring together top celebrities in a given category for in-person events.

Cameo’s accumulating insight can add to more than just an optimization strategy. As micro-influencer talent on the Cameo platform succeeds, the company has an opportunity to take financial stakes in potential stars. This may look similar to the growing international trend of influencer incubators.

The largest influencer incubator in China is Ruhnn. Ruhnn originally started as an e-commerce fashion retail company called LiBeilin. They grew LiBeilin to one of the top 10 women’s fashion brands reaching approximately ¥200 million in sales in 2014 before transitioning their business model to become the first “blogger incubator” in China.

Instagram is the consumer-first, social platform that bloomed a class of new influencers. Could Cameo flip this model- using high pull influencers to bring users into a new social media experience?

This could be a fundamental shift — Cameo transitioning from a revenue opportunity for celebrities to a marketing channel. Eventually, like Instagram, Cameo could become a table stakes piece of a broader social marketing strategy.

If you’re building something in this segment, please reach out. I’m always open to chat, learn, and collaborate. Feel free to reach me at — 2amritsingh2@gmail.com or on Twitter

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