Steps has acquired Fanhouse, but some creators are concerned

Image credits: Us / Getty Images

Creator monetization platform Fanhouse announced yesterday that it has been acquired by Passes, a similar startup that only launched in beta in December.

We just answered a call maybe 36 hours ago, and then closed the deal 24 hours ago, Lucy Guo, the founder of Passes, told TechCrunch.

Guo declined to disclose terms of the deal, but Fanhouse is a much more established platform. Fanhouse, founded in 2020, last year raised a $20 million Series A led by Andreessen Horowitz, while Passes raised a $9 million seed led by Multicoin Capital, a crypto-focused fund. Passes, still in beta, currently only works with about 40 creators.

Despite the swiftness of the deal, not all of the Fanhouses founders were sold. Rosie Nguyen, also a creator known as @jasminericegirlannounced his departure from the company, hours before The Information broke news of the deal.

I made the difficult decision to resign from the Fanhouse today, Nguyen tweeted. I started the company to help creators, like me, who needed to provide for themselves and their families. I care deeply about creators and want to help them in a way that better aligns with my values.

He added that he had not benefited financially from the deal and had left the company with no severance or exit package.

The sudden changes to the Fanhouse have caused concern among the creators. Some people were concerned about a tweet from Guos in which he claimed that Passes was working on a technology that he could optionally produce AI similarities of the creators. These concerns escalated after Twitch streamer Riley Rose underlined that Passes has no content guidelines on its website.

It’s just that [Fanhouses] the content guidelines are very, very specific, Guo told TechCrunch. Lui said that because Fanhouse used Stripe as its payment processor, the company needed to be very clear with users about what they can and can’t post. We have content guidelines, it’s just more permissive.

However, there are currently no content guidelines available on the Passes website. Guo said Passes will be more lenient with the types of content it allows, as it uses a different payment processing method, but declined to share any further details. In addition to telling creators what they can and can’t post, content guidelines are also needed to protect users from harassment, hate speech, and other objectionable behavior.(Edit: Guo says the guidelines are online here.)

We have high-risk credit card processing, Guo said. So while we don’t do nudity on our site, if we were to, it’s okay for the credit card processors to agree.

Passes has a built-in customer relationship management (CRM) system, which Guo says has helped creators better tailor their content to their highest-paid fans.

We stole creators from every platform and, at the very least, doubled their revenue, Guo told TechCrunch. It’s annoying to compete with platforms for creators, so we could just drop one and bring in all creators with no problem.

Nguyen, however, says income isn’t the most important factor for creators when choosing to join a new platform.

It’s not just about the money, it’s about which platform will take care of me, Nguyen told TechCrunch. Not every platform cares about its creators and the creators want to feel safe and cared for more than anything.

Companies in the creator economy are unique, because when two companies merge, they’re not just combining assets. They are responsible creators essentially small businesses that use their platform to make a living, and it can be difficult to switch to a new platform with only a few weeks notice. And when startups have so much investor pressure to expand, that growth can come at the expense of creators, whose businesses often fare better over the long term in slow, sustainable ways.

While Guo assured the creators that Passes has their best interests at heart, Nguyen was dubious, so he left Fanhouse while the deals closed.

It can be difficult for companies that have taken VC money to align their investors’ incentives with those of their users, Nguyen told TechCrunch. That system doesn’t work for many companies, especially creator companies.

Nguyen added: A creator platform that isn’t founded by a creator will struggle to understand those creators.

Now, the creators of Fanhouse must choose whether to continue creating content on the passes. Within the next few weeks, the accounts of creators and fans who have opted-in will be transferred to Pass, where they will be able to use the same login credentials to access the site. To ease the transition, Passes offers creators a 95% win rate for the first six months. Then, that rate will drop to 90%, the same rate as Fanhouses, which remains above industry standards.