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Jellysmack sold its catalog-licensing business JellyFi as it prioritizes core initiatives

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Creator-economy startup Jellysmack has sold its catalog-licensing business, JellyFi, a company spokesperson told Business Insider.

Copyright Capital, which works with creators and agencies to buy content rights, acquired Jellysmack’s funding arm and creator investment portfolio in March, the firm’s finance lead Frederic Porcherot confirmed to BI. The companies did not disclose the terms of the deal.

“Jellysmack’s team has been extremely professional, and we hope to continue collaborating with them on many other opportunities,” Copyright Capital’s CEO Jack Ojalvo told BI in a statement.

Jellysmack, founded as Keli Network in 2016, rose to prominence in the creator space by helping YouTube creators repost their content on other ad-supported platforms like Facebook and Snapchat. It signed up top stars like MrBeast and PewDiePie and raised a nine-figure Series C from SoftBank in 2021.

The company entered the catalog-licensing business in early 2022, saying it would set aside $500 million for the effort. It later bundled the strategy into an investment unit that it called JellyFi, saying it would pay creators a certain amount upfront in exchange for the rights to future ad revenue on their content.

“There’s a lot of value in the library that, particularly in YouTube, that these creators have generated, but they have to wait generally a long period of time to extract the whole tail of that value,” former Jellysmack president Sean Atkins told BI in January 2020.

From a production arm to AI, Jellysmack has tried out a batch of new business lines

Investing in creator content has become a hot category in recent years, as companies like Spotter and Creative Juice emerged to bring catalog buying and investment strategies that have been successful in other areas of entertainment to the creator industry.

But the business of buying licensing rights proved challenging for Jellysmack. Former employees and creator partners told BI that influencers were not keen on handing over the keys to their YouTube accounts, and competition in the category made it hard to win new business.

“One of the things Jellysmack found out really quickly is that creators do not want to do anything to rock the boat on their YouTube revenue,” said one former staffer, who spoke on the condition of anonymity as they were not given permission to speak about the company.

Two other former Jellysmack staffers, who requested anonymity, told BI that Jellysmack’s offers for back-catalog rights were often less lucrative or not structured as favorably compared to what Spotter was selling. The staffers’ identities are all known to BI.

The Jellysmack spokesperson said the company was prudent in its offers for catalog licensing based on its algorithmic predictions and the potential for profitability. The company chose to deprioritize JellyFi in favor of more profitable core initiatives. The business remained competitive and generated revenue until it was sold, they said.

Jellysmack has tested in recent years a variety of new business lines, including a production arm called JellySmash Productions and an AI assistant called Jelly X. More recently, it’s been acquiring content businesses like Network Media LLC and The Law&Crime Network.

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