Whenever YouTube superstar MrBeast pops up in business or tech headlines, you’re guaranteed to find a slew of baffled comments: Who is this man and why is a YouTuber so important? Am I old if I don’t know who this is? Why is he younger than me, yet makes so much more money? Is this guy really giving people free islands, or is he full of them?
If you don’t know who MrBeast is, that’s fine. That just means you probably aren’t on YouTube all that often, or you’ve never wondered what happens when you put 100 million Orbeez in your friend’s backyard. But let me ask you this: Have you heard of Cribl, Snapdocs, Sayo Bank, or Dust? Neither do I, those are just a few names of companies worth over $1 billion that I pulled from Crunchbase.
According to TBEN sources, MrBeast – the 24-year-old named Jimmy Donaldson – is trying to raise $150 million for his company, worth $1.5 billion. It may seem hard to imagine how a content creator’s business could be worth so much, but the North Carolina native has built an impressive empire. With 109 million YouTube subscribers, MrBeast runs the fifth most subscribed channel on the platform, and is the largest earner among US YouTubers. On his other five channels, he has amassed another 82 million subscribers – not to mention his three Spanish-language channels, which together have some 33 million subscribers.
YouTube is one of the most profitable platforms for creators because as a member of the YouTube partner program, you can earn 55% of the advertising revenue. But MrBeast has expanded his business beyond the social media realm — he’s used his brand to open MrBeast Burger, a ghost kitchen food chain and snack company called Feastables, which raised $5 million this year against a $50 million valuation of 776. Capital and Sugar Capital.
But MrBeast’s business model is not as simple as creating videos and bringing in ad revenue. His uploads, which focus on extreme stunts and competitions for cash prizes, cost an obscene amount of money to make. Last year, his 25-minute “Real Life Squid Game” video required a whopping $3.5 million including over $456,000 in prize money. In comparison, the nine-episode “Squid Game” series cost Netflix $21.4 million in total, averaging about $2.4 million per one-hour episode.
A few weeks ago, MrBeast said he spends $8 million a month on his businesses. Last September, MrBeast told creator-focused YouTube channel Colin and Samir that he was spending $4 million each month. That’s a big jump.
Some companies reach unicorn status (a valuation of over $1 billion) before they’ve even made a profit. Still, TBEN estimates that MrBeast made $54 million in 2021, so he has already proven to VCs that they can bet on him to pay back their investment.
“The videos are watched even when I’m not uploading, so if I really wanted to, I could just live off the money the views made,” MrBeast told Insider. But if the 24-year-old wants to grow even faster and make more profit, then venture capital financing might make sense.
MrBeast has already received smaller-scale funding from companies like Jellysmack and Spotter. Jellysmack uses AI to maximize the cross-platform growth of top makers in exchange for a cut in revenue; Spotter gives YouTubers large sums of upfront capital in exchange for revenue from their back catalog. But as one of the most successful content creators in the world, MrBeast can grow even bigger with venture capital.
But is going bigger always better? MrBeast’s business model is like a snake eating its own tail – nobody makes money like him, but nobody spends it like him. He described his margins as “thin” in a conversation with Logan Paul, as he reinvests most of his profits back into his content. Its viewers expect each video to be more impressive than the last, and from the outside it seems only a matter of time before MrBeast can no longer raise the bar (and for other creators this has spelled disaster). So if MrBeast’s company is really a unicorn – I bet it is – then he has two choices. Will he use the $150 million pillow to make his business more sustainable so he doesn’t have to bury himself alive? Or does he keep pushing for more until there’s nothing left?