Niche raises $2.5 million to help Internet celebrities get paid

May 15, 2014, 1:56 PM UTC

FORTUNE — Last month, New York magazine dove into the weird world of Internet celebrity, profiling 18 people who are relatively unknown in the mainstream world, but wield massive influence on Instagram, Vine, YouTube, Tumblr and various other social networks. From the article:

“There is a parallel universe out there, on the internet, of celebrity—true, valuable, vast opportunities for reach and audience connection. Stars don’t just start online; they live there. For teenagers, there exists a whole other set of idols, who are so famous that “real” celebrities, like Kim [Kardashian]—not to mention corporations and the newly selfie-obsessed president of the United States—want to learn their secrets.”

A young startup in New York, created by former executives at BuzzFeed, Huffington Post, and YouTube, has positioned itself to help share those secrets. Niche connects corporations and brands to the stars of social media. “We work with all of those NY Mag people, and hundreds of others,” says co-founder Rob Fishman. “We’re the leading advertiser on Vine and Instagram.”

Today Niche announced it raised $2.5 million in venture funding to continue building out its platform and team. SoftTech led the around, alongside Lerer Ventures, SV Angel, Advancit Capital, William Morris Endeavor, Kevin Colleran, Gary Vaynerchuk and seed investor Box Group.

MORE: Craft kit startup Darby Smart raises $6.3 million to beat Hobby Lobby on the web

The combined reach of Niche’s 2500 social media stars (called “creators”) is more than 507 million followers. The company has run campaigns from 70 brand advertisers, including Procter & Gamble (PG), General Electric (GE), American Eagle Outfitters and the NFL.

The platform works as such: Advertisers on Niche’s platform get paired up with creators that are relevant to their message. Niche’s creators make Vines, YouTube videos, Instagram photos, and various other social content around that message and share it with their followers. (Brands get approval first.) The result is an engaging piece of branded content (not to mention an endorsement), like this Instagram photo of American Eagle clothing by Amymarie Gaertner. The photo garnered more than 18,000 likes.

Let me see YOUR individuality shine by joining me in the @americaneagle Live Your Life campaign!✌️

Or this Vine for NFL, by Kc James. More than 58,000 people liked it, and more than 23,000 people shared it.


Brands spread their campaign across five to 50 of influencers at a time to achieve a large reach. In that way, Niche works more like a good old fashioned digital media buy than hiring a celebrity spokesperson.

Fishman calls Niche a “native advertising factory” because it allows brands to reach large audiences on these social media platforms in a way that is native to the platforms themselves. As the long, long list of social media failures by brands shows, it’s difficult for a corporation to understand the nuances of Instagram or Vine as well as its most popular power users do. And new platforms with new cultural norms spring up by the month. Niche lets brands spread their message through savvy influencers, and it allows the savvy influencers to make some cash while doing it. In the last four months, Niche has paid 500 creators more than $650,000.

Of course, these social networks have native advertising products of their own. Fishman says the introduction of ads on Instagram and Vine will help Niche, because brands will pay to amplify the branded content that Niche’s creators made through Instagram’s advertising platform.

Niche has a team of 15. It has brought in $1.5 million in revenue and operated profitably since its launch last Fall. Earlier this week, Niche was named to Time Inc’s annual list of 10 NYC Startups to Watch.