Passes Gets $40M for new Direct-to-Fan Platform

March 20, 2024 by  Chris Erwin

RockWater Roundup

RockWater analysis to make you a better investor and operator. Today we discuss Passes’ $40M Series A, and why founder Lucy Guo succeeded where so many others did not.

Passes raised a $40M Series A. 

Why did founder Lucy Guo succeed where so many creator co’s didn’t?

Let’s break it down…



  • $40M Series A
  • Led by Bond Capital
  • Other investors incl Crossbeam Ventures (partner Mike Ovitz is CAA founder), founders of Kim Kardashian’s SKIMS, Abstract Ventures, and pro poker / chess streamer Alex Botez



  • Growing engineering, ops, creator support, mktg, and sales teams
  • 1st product “helped creators scale their engagement with their community, turning fans into superfans” 
  • Next product will add additional revenue streams for creators



  • Creator direct-to-fan subscription and CRM platform for exclusive content and experiences
  • Incl tips, live streaming, 1:1 fan calls, and unlockable posts/DMs 
  • Takes 10% rev share, plus a 30-cent transaction surcharge
  • In 2023 acquired Fanhouse (founded 2020, raised $20M from A16z in 2022. Ouch!)
  • In Jan 2024 was sued by peer Fanfix (more info below)
  • Vision > turn creators into entrepreneurs
  • Goal > create a meaningful income source for creators via subscription and CRM product
  • Problem to solve > Offset uncertainty from unpredictable brand deals, algo changes, and improve upon bad competitor UX 
  • < 10 team members (per LinkedIn)



  • Paid out tens of millions to creators
  • Some creators make $1M+ per year
  • 1,000+ clients
  • Top clients incl Anna DeGuzman, a runner-up on America’s Got Talent; TherapyJeff, who offers relationship advice; and TikTok astrologer Maren Altman



  • Founded 2022 by Lucy Guo (see impressive bio below)
  • Launched publicly 2023
  • Based in Miami
  • Summer 2023 raised $9M seed led by Multicoin Capital (crypto and blockchain investor), plus Florida Funders, Anti Fund (Jake Paul), Craft Ventures, Menlo Ventures, 11:11 Media (Paris Hilton), Joe Montana, Eventbrite founder

📝NOTE: This is a smart cap table mix of media, celebs, and tech investors. They can bring talent, audience, and strategic partnerships. Aligns with FazeWorld seed raise cap table, which I covered here.


Here’s some backstory on founder Lucy Guo, a prolific builder and entrepreneur since her teens…

Started building Internet mktg and ad businesses in 2008 while in high school. 2014 enrolled in Carnegie Mellon, dropped out 2014. Became a Thiel fellow. Then got blue-chip product experience → engineering intern at Facebook > product designer at Quora & Snap. 

Then co-founded Scale AI in 2016 w/ Alexander Wang, now valued at $7B+. They create high quality training data for AI applications. Guo left in 2018 “due to differences in product vision and road map”. 

Also in 2016 started building other web and mobile apps. In 2019, after leaving Scale AI, founded Backend Capital, which has invested in 50+ startups

Then started Passes in 2022. 

Has become a vocal advocate for Miami’s tech scene. Moved there during COVID. 


More insights on Passes’s offering to creators and platform features…

Original company positioning was a “Web3 Patreon”. But NFTs didn’t take with creators.

Quote from The Information explains new value prop → “While [Guo] still thinks Web3 will be reborn someday, her main selling point for Passes is that it is the leading nonexplicit alternative to OnlyFans—a place where creators can offer exclusive access to their lives, minus demands for nudity (Passes doesn’t allow explicit content).”

I like this line from Guo…“I believe creators are small businesses, and it’s Passes’ goal to turn them into large businesses.”

Investors seem to dig because they see a few players in this space, but believe peer user experiences and interface are “terrible”. 

Passes’ ML algorithm reviews every uploaded image to improve safety. Helps creators attract brand partners. Also has features like screenshot-blocking and automated sales messages.

According to Guo, the platform will further integrate AI into the platform in the near future, with a focus on facilitating creators’ sales efforts.

Has built-in CRM, which helps creators tailor their content for highest-paying fans.


The Fanfix litigation…

This is a good summary from The Information → “Fanfix, which is now owned by influencer marketing firm SuperOrdinary, alleges that Passes recruited and conspired with a former Fanfix employee to steal Fanfix’s trade secrets and confidential information. This  included financial information about creator engagement on Fanfix, such as how much revenue creators generate; contacts for creators and their agents; and information on Fanfix’s expansion strategy in the Middle East and North Africa.”

There’s also accusations that Passes is providing services below cost, which is a violation of California’s Business and Professional Code due to anti-competitive behavior.

I don’t know the current state of the lawsuit, and for the purposes of time, will not dive into the details. The main point here is that competition for direct-to-fan platforms is increasing, highlighting the attractiveness of the market opportunity. In turn, market players are pursuing various tactics in the fight to protect their piece of the revenue pie. 


My overall takeaway…

Guo is a rare breed of entrepreneur. Building in a large market where many competitors have failed. Has good early user traction. Still lots of risk, and much to prove out to get a good ROI on over $49M raised.

Using simple deal math, if Guo gave up 20% equity in her recent Series A, implied valuation is $200M. For investors to get a good return, seems min enterprise value target would be $600M to 1B, a 3 to 5x multiple of today’s valuation. 

At the high end range of ARR multiples today, call it 10x, that equates to $60 to $100M in net revenue. Based on press releases about “tens of millions” of creator revenue (which is gross revenue), and with Passes’ 10% cut, that equates to net revenue in the low 7 figures.

Means there’s a lot of work to still be done. 

But I’m not surprised investors are taking a big bet on her. There are some good early signals here from the press releases. And if Passes doesn’t work out, Guo’s next company could be another unicorn. She clearly has many more ideas up her sleeve. 

And smart investors play the long game with good entrepreneurs.



I’m the founder of RockWater Industries. We do financial and strategy advisory for media, agencies, and creator economy. From M&A and fundraising to consumer research and go-to-market planning.

DM me on LinkedIn or email me chris @ wearerockwater dot com

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