As private-credit strategies become increasingly important for Hollywood, one independent financial-tech firm is raising millions from investors on the promise that it can provide vital capital to help hot new series and blockbusters get made.
FilmHedge, an Atlanta-based fintech launched in February 2020, provides liquidity to productions with budgets ranging from $1 million to $50 million. The company offers term loans up to $10 million and lines of credit up to $25 million. Productions can apply for the cash on FilmHedge’s website and, if approved, can access their loan within 24 to 72 hours.
The startup also maintains a robust repository of data tracking scripted projects to help equip other institutional investors, like asset managers and family offices, that want to be part of developing IP for entertainment while minimizing their risk.
Founded by producer and financier Jon Gosier, FilmHedge has so far loaned capital to more than 20 scripted TV and film projects, including award-winning shows on Netflix and films starring Academy Award-winning actors, a company spokesperson said. For contractual reasons, FilmHedge is unable to name most of the projects to which it’s extended capital.
In May FilmHedge announced a $25 million production financing partnership with Riveting Entertainment Group, Variety reported. FilmHedge is also helping to finance “Collateral Data,” an upcoming thriller Gosier is producing and directing that’s partially based on his memoir, “Code Switch.”
Gosier — whose CV includes founding several tech firms focused on data, healthcare, and financial services, among other roles, like author — is betting the FilmHedge model can help borrowers, like creators and filmmakers, maintain ownership over their projects in a way that selling their original IP to big streamers or studios often doesn’t allow. The company’s volume of applicants grew from 40 in 2021 to 260 in 2022, it said in a report.
“These are people who have deals with known entities — Lionsgate, Netflix, Disney, all these types of groups,” Gosier told Insider in April, “but they don’t want those groups to finance them 100%, because they want to retain control over what they’re creating.”
In March, the fintech closed on a $5 million Series A round led by Collab Capital, WOCStar, the Savannah College of Art & Design, and TriplePoint Capital — the fundraise was first reported by Axios. The money will go toward hiring for open roles and growing FilmHedge’s marketing and product teams, it said in a press release. It follows a $100 million credit facility from Coromandel Capital and Fallbrook Capital in 2022, which helps FilmHedge finance projects.
Speaking with Inisder a few weeks before the Hollywoood writers’ strike looming, Gosier said FilmHedge hadn’t experienced a slowdown in applications for new financing. He added that post-production costs for projects that have wrapped filming — from special effects to reshoots to dubbing audio — can drive needs for additional capital. In fact, demand for dollars has already outstripped the volume of credit that the firm can lend, Gosier said, meaning it’s selective about the projects to which it lends.
“We have access to $100 million, but we see around $70 million in applicants per month,” he said, “so we have to pass on a lot of deals.”
How FilmHedge leverages data
Through its data platform, FilmHedge also gives investors like banks and hedge funds a real-time “live audit” of how projects are spending money, including breakdowns for expenses like hiring and payroll, Gosier said. The system also tracks the creditworthiness of producers and production companies, giving investors a sense of the risk tied to certain projects by illustrating why they’re stalling or behind schedule.
In Hollywood, data is increasingly taking center stage.
Media giants like Netflix and smaller production shops alike are increasingly leaning on the power of data and algos to influence the IP they greenlight. And Wall Street is growing bullish about an emerging class of startups using historical data to make forward-looking inferences about new scripts’ prospects, one private credit investor told Insider.
Embracing data to help make projections about whether projects are destined for success is a net positive, in Gosier’s view. Otherwise, what gets made in Hollywood “becomes very much just the subjective opinion of some very powerful gatekeepers,” he said.
FilmHedge gave Insider a look at the 18-page pitch deck it used while raising its $5 million Series A round and $100 million credit facility — check it out here.
This article was first published in April and has been updated with the news of FilmHedge’s partnership with Riveting Entertainment Group.