Why on earth is Cameo worth $1 billion? An explainer

Cameo, the platform where you can hire Lindsay Lohan ($375), Vanilla Ice ($300), or Debbie Gibson ($249) to sing your bestie happy birthday, is now valued at over $1 billion. What? How? Read on.

So how exactly is Cameo worth $1 billion?

Cameo just raised $100 million in Series C funding, pocketing cash from A-list dough-makers like SoftBank Vision Fund 2, Google Ventures, UTA, and Amazon’s Alexa Fund. Altogether, the fresh financial infusion pumps Cameo’s value into unicorn territory.

What exactly does Cameo offer?

Personalized videos from celebs, often in under 24 hours. The company says that 80% are gifts, mostly for birthdays, along with announcements (think baby, wedding, etc); roasting or friendly trolling are also common.

How much does Cameo actually make?

Cameo says it has made over 2 million videos. Its CEO told the Wall Street Journal that it generated $100 million last year, four times what it made the year before, but keep in mind, 75% went to creators. Cameo’s fast growth could help explain the valuation.

So why did venture funds invest in Gilbert Gottfried roasting strangers?

As social media apps go, Cameo has a stunningly functional business model: customers pay hundreds or thousands of dollars for a one-time transaction, of which Cameo takes a 25% cut, with no major overhead. This is far more dependable a business model than, say, a social media company with millions of users but no clear path to monetization, or anything involving the ad market, which is increasingly unpredictable as the media world continues to fracture.

Can Cameo grow?

Oh yeah. One word: international. Only 20% of Cameo videos are currently purchased outside the United States.

What are some similar companies?

Other direct fan-to-celeb companies are also flourishing: Patreon and OnlyFans are both unicorns, and Substack is more than halfway there. Altogether, this suite of companies is erasing the longtime gatekeeper role of big media, and directly connecting consumers with content creators in new ways.

How has the pandemic affected Cameo?

It’s been a boon. The financial realities of the pandemic dissipated any lingering celeb stigma about for-pay video gigs on an app. (Just 18 months ago, flat refusals from celebs were not uncommon.) Cameo pivoted by adding options like Zoom chat bookings with celebs.

Which celebs earn a lot?

A 2020 analysis found that Cameo’s top seven earners were men: comedian Michael Rapaport (known for his rants), Office actor Brian Baumgartner; actor Gilbert Gottfried (known for roasting your friends); former Shark Tank businessman Kevin O’Leary; comedian James Murray; Lord of the Rings actor Sean Astin; and gossip maven Perez Hilton. All make in the range of $175,000-$250,000 per year. Over 150 Cameo stars earned more than $100,000 last year.

Are there any women on Cameo?

Yep. Real Housewives NYC’s Sonja Morgan and Bethenny Frankel, as well as singer Debbie Gibson (seen here, announcing a customer’s wedding), rounded out the top 14 last year. Frankel, who initially declined to be on the app, was also a Series A and B investor, and says her investment has grown more than 20-fold. Snoop Dogg and Tony Hawk are also investors.

What’s next for Cameo?

Look for Cameo at work: Think celeb appearances at your events and conferences, as well as celebs schilling products—the latter of which may threaten to erase the longstanding phalanx of agents and corporate marketers who connect celebs with endorsement opportunities. Cameo is betting big on this to diversify its revenue. And oh yeah, employee recognition: Its website suggests using Cameo videos for “legendary promotion announcements.”