Is MrBeast Really Worth $1.5 Billion? • TechCrunch

Whenever a YouTube superstar MrBeast pop up in a business or tech headline, you’re guaranteed to find tons of puzzled comments: Who is this guy and why is YouTuber such a big deal? Am I old if I don’t know who this is? Why is he younger than me but makes so much more money? Does this dude really give to people free islandsor is he full of it?

If you don’t know who MrBeast is, that’s okay. It just means that you’re probably not on YouTube that often, or that you’ve never thought about what happens when you put 100 million Orbeez in your friend’s yard. But let me ask you this: Have you heard of Cribl, Snapdocs, Sayo Bank, or fabric? I don’t have either, these are just some names of $1 billion+ companies I pulled from Crunchbase.

In accordance with AxiosMrBeast sources – a 24-year-old named Jimmy Donaldson – is trying to raise $150 million for his business, valuing it at $1.5 billion. It may seem hard to imagine how a content creator’s business could be worth so much, but the North Carolina native has built an impressive empire. With 109 million YouTube subscribers, MrBeast operates the fifth most subscribed channel on the platform and is the highest grossing YouTube channel in the US. He’s amassed another 82 million subscribers on his five other channels — and that’s not even counting his three Spanish-language channels, which together have about 33 million subscribers.

YouTube is one of the most profitable platforms for creators because you can earn 55% of your advertising revenue as a member of the YouTube affiliate program. But MrBeast expanded his business beyond social media – he used his brand to open up MrBeast Burgera ghost kitchen food chain and a snack company called Feastables, which raised $5 million this year for Estimated $50 million from 776, Shrug Capital and Sugar Capital.

But MrBeast’s business model isn’t as simple as making videos and earning ad revenue. Its downloads, which center on extreme stunts and competitions for cash prizes, cost obscene amounts of money. Last year, his 25-minute “Game Real Life Squid” video required colossal 3.5 million dollars production, including over $456,000 in prize money. For comparison, the nine-series “Squid game” series cost Netflix in total 21.4 million dollarswhich averages out to about $2.4 million per hour of contribution.

A few weeks ago MrBeast said he was spending 8 million dollars per month on his enterprise. It was only last September that MrBeast spoke on the creator-oriented YouTube channel Colin and Sameer that he spent 4 million dollars every month. That’s a big leap.

Some companies reach unicorn status (a valuation exceeding $1 billion) without even turning a profit. Yet Forbes believes that MrBeast did 54 million dollars in 2021, so he’s already proven to VCs that they can bet on him to return their investment.

“Videos get views even when I’m not uploading, so if I really wanted to, I could just live off the views,” said MrBeast Insider. But if a 24-year-old wants to grow even faster and generate more revenue, then venture capital might actually make sense.

MrBeast has already received funding on a smaller scale from companies such as Jellysmack and Spotter. Jellysmack uses artificial intelligence to maximize cross-platform growth for top creators in exchange for a cut of revenue; Proofreader provides YouTubers with large amounts of seed capital in exchange for profits from their back catalog. But as one of the most successful content creators in the world, MrBeast can get even bigger with venture capital.

But is it always better to zoom in? MrBeast’s business model is like a snake eating its own tail – nobody makes money like him, but nobody spends it like him. He described his margins as “razor thin” in a conversation with Logan Paul as he reinvests most of his profits back into his content. His viewers expect each video to be more impressive than the last, and from the outside it seems like it’s only a matter of time before MrBeast can no longer up the ante (and for other creators, this has led to disaster). So if MrBeast’s business is indeed a unicorn – I’d bet it is – he has two options. Will he use the $150 million cushion to make his business more sustainable so he doesn’t have to continue bury yourself alive? Or will he keep pushing for more until there’s nothing left?