FilmHedge Closes $5M Series A Round, $100M Credit Facility
Tuesday, March 7th, 2023
FilmHedge, the entertainment industry’s leading non-equity financiers for film and television productions, has closed a $5 million Series A round of financing led by Collab Capital, WOCStar, SCADPro (Savannah College of Art & Design) and TriplePoint Capital, among other participants.
The fintech company works to eliminate financial problems like going over-budget, misappropriation of funds, and fraud by monitoring producer spending with its proprietary technology platform, security protections not previously available. This level of tracking also helps inform the company and its partners to target very specific, well collateralized, productions including those secured by completion bonds, that leverage state tax incentives, or that have agreements in place with well known distributors.
FilmHedge will use the proceeds to expand the product and marketing teams, hiring for key open roles. Non-traditional investors in private equity and alternative-debt have flocked to the business model, which has helped create access to otherwise exclusive deals in the tightly-controlled entertainment business.
“Market conditions continue to shift favorably for us, and we had a tailor-made opportunity to tap equity financing that will accelerate growth and scale our team in several key areas,” said FilmHedge Co-Founder and Chief Executive Officer Jon Gosier. “There’s immediate value built into our financing deals, which have produced 11.28% returns on average, but longitudinally, we believe the data we are collecting on entertainment finance will be the company’s greatest asset.”
In May of 2022, FilmHedge closed a $100 million credit facility from Coromandel Capital and Fallbrook Capital, with options to expand both lines of credit. In the previous year, FilmHedge allocated more than $100 million to more than 20 productions, including scripted series, award-winning docuseries, and feature length films, netting more than $13 million in returns. In deals where the company isn’t the primary lender, other lenders use FilmHedge’s data products, risk-rating models, and underwriting tools to improve their own decision making.
“The business of film and entertainment is an unstoppable force, as studios and streamers continue to allocate capital toward original content creation,” said FilmHedge Chief Financial Officer Josh Harris. “It’s our mission to unlock new financial products and resources for the entertainment industry and our proprietary formula is capable of de-risking the lending process.”
The average return on transactions through FilmHedge in the last year was 11.28%, above industry averages. According to internal data, the most lucrative projects have been by producers working within a budget of $5 to $30 million.
“Jon has the innate ability to see a problem and find a way to leverage technology to solve it," said Barry Givens, managing partner of Collab Capital. "That vision has helped get FilmHedge to where it is today -- a highly sought after platform for improving transparency and reducing risk in film financing. Collab Capital sees incredible value in the high growth FilmHedge business model. It is one that is setting a new precedent for the entertainment industry while being revenue focused with a clear path to profitability."
The company plans to double down on film and TV debt financing, which is estimated as a $68 billion market, but has opportunities to expand into other areas of media like gaming and music in the future.