Sonovate & XPO Strike Exclusive Funding Partnership to Resolve Payment Disconnect Between Brands and Their Influencers
- Fund Management , Payments , Financial
- 02.12.2021 10:25 am
- Sonovate becomes sole funding partner to XPO for fast influencer payments by brands
- Influencer marketing market worth $14bn globally, and still growing
- Sonovate data shows 57% of young people believe freelance work gives them the flexibility to experiment with different career routes
- But 56% of contract workers will only work for a company which had a track record of paying wages on time, and 48% refuse to continue to work for a company which doesn’t pay on time
- 53% of businesses agree that it is unrealistic to expect contractors to wait 30 days to be paid, but 31% routinely fail to pay freelancers on time
Sonovate, the embedded business finance lender, and XPO, the digital payments app for social media content creators (or ‘influencers’), have agreed a strategic partnership that sees Sonovate named XPO’s exclusive funding partner.
Under the terms of the partnership, Sonovate becomes XPO’s sole funding partner, helping to ensure the thousands of influencers that use XPO to manage their payments get paid by the brands that use them in full and on time, every time.
Combining Sonovate’s industry-recognised embedded finance tools and XPO’s easy-to-navigate app, the partners help influencers to get paid within as little as 24 hours after completing a job.
The first financial intermediary of its kind, XPO pays out to content creators on behalf of the brands using them, including TikTok, Nike, Experian, BooHoo and Estee Lauder. Since launching its app in summer 2021, XPO has helped creators collectively save five years of waiting time.
The market for influencers is growing extremely fast. Industry figures suggest influencer marketing today is worth approximately $14 billion globally*, and predict that by 2022 the market will be twice the size it was in 2019**.
Richard Prime, co-founder and co-CEO at Sonovate, commented: “XPO is building up a significant first-mover advantage in a market that is massively underserved and hugely scalable. The traditional 90-day payment cycle of businesses simply doesn’t chime with a modern gig worker’s expectation of near-immediate invoice settlement. Increasingly, businesses recognise the benefit of using gig workers, such as influencers, to help them engage new customers, but too few of them are set up operationally and financially to handle changing payment expectations. We’re delighted to support XPO to bridge the gap in this market with a commonsense solution that works for all.”
Lotanna Ezeike, co-founder & CEO of XPO, added: “Younger people’s desire for greater ownership over what they do and how they spend their working lives has been a big driver behind content creation as a career path. Brands are alive to this shift and are working out how best they can work with content creators and get the best from this generation of young people determined to work differently. Our partnership with Sonovate provides brands with an attractive alternative to managing multiple influencers a month and the huge admin issue that this creates. Not only do we manage the flow of finance, but we facilitate communication between brands and influencers, ensuring a good working relationship.”
Data from Future World of Work, a report published by Sonovate last month, shows that portfolio careers, side-gigs and flexible working are priorities for the UK's next generation of workers. Three in five young people (59% of 18-34 year olds) expect “portfolio careers” will become more popular among younger workers in the next ten years; the same proportion of young people believe freelance work gives them the flexibility to experiment with different career routes (57%) and half see the advantage of contract work while having a family or pursuing personal interests (50%).
However, it’s not all been smooth sailing. There is a persistent disconnect between the expectations of freelance workers surrounding the speed of payment for work done, and the internal systems and processes of the brands that use them.
Over half (56%) of contract workers in Sonovate’s report say they will only work for a company which had a track record of paying wages on time, and almost half of them (48%) refuse to continue to work for a company which doesn’t pay on time. The report also found that, while 53% of businesses agree that it is unrealistic to expect contractors and freelancers to wait up to 30 days to be paid, a third (31%) of them routinely fail to pay freelancers on time.