How Hollywood Fintech FilmHedge Raised Millions to Fund Movies, TV Shows

• FilmHedge provides credit to films and television series with budget needs between $1 million and $5 million.
• The 3-year-old fintech closed a $5 million round in March and has a $100 million credit facility.
• Founder Jon Gosier explained why FilmHedge’s model resonates as Hollywood moves to private credit.

As private credit strategies become increasingly important to Hollywood, an independent financial technology firm is raising millions from investors with the promise that it can provide vital capital to help new series and blockbusters get made.

FilmHedge, an Atlanta-based fintech launched in February 2020, provides liquidity to productions with budgets from $1 million to $50 million. The company offers time-limited loans of up to $10 million and lines of credit of up to $25 million. Productions can apply for the money on FilmHedge’s website and, if approved, can access the loan within 24 to 72 hours. The startup also has a robust stock of data tracking projects to help equip other institutional investors, such as asset managers and family offices, who want to help develop entertainment IP while minimizing risk.

Founded by producer and financier Jon Gosier, FilmHedge has so far lent capital to more than 20 scripted TV and film projects, including award-winning shows on Netflix and movies with Oscar-winning actors, a company spokesperson said. For contractual reasons, FilmHedge is unable to name most of the projects to which they have extended capital. It’s also helping finance “Collateral Data,” an upcoming thriller Gosier is producing and directing that’s based in part on his memoir, “Code Switch.”

Gosier — whose resume includes founding several technology firms focused on data, healthcare and financial services, among other roles, as an author — is betting that the FilmHedge model can help borrowers, such as creators and filmmakers, maintain ownership of their projects in a way which selling its original IP to major streamers or studios often does not allow. The company’s applicant volume grew from 40 in 2021 to 260 in 2022, says a report.

“These are people who have deals with well-known entities — Lionsgate, Netflix, Disney, all these types of groups,” he told Insider, “but they don’t want these groups to fund them 100%, because they want to keep control of what they make.”

Last month, the fintech closed a $5 million Series A round led by Collab Capital, WOCStar, Savannah College of Art & Design and TriplePoint Capital — the fundraising was first reported by Axios. The money will go toward hiring for open roles and expanding FilmHedge’s marketing and product teams, a press release said. It follows a $100 million credit facility from Coromandel Capital and Fallbrook Capital in 2022, which is helping FilmHedge fund projects.

Even with a possible writer’s strike looming, FilmHedge hasn’t seen a drop in applications for new funding, Gosier said, noting that post-production costs for projects that have wrapped filming — from special effects to reshoots to dubbing audio — can increase needs. for additional capital as well. In fact, demand for dollars has already outstripped the volume of credit the firm can lend, Gosier added, meaning it is selective about the projects it lends to.

“Right now we have access to $100 million, but we’re seeing about $70 million in applicants per month,” he said, “so we have to pass on a lot of deals.”

How FilmHedge utilizes data

Through its data platform, FilmHedge also provides investors such as banks and hedge funds with a real-time “live audit” of how projects are spending money, including breakdowns for expenses such as hiring and salaries. The system also tracks the creditworthiness of manufacturers and production companies, giving investors a sense of the risk associated with certain projects by illustrating why they are stalled or delayed.

In Hollywood, data is increasingly at the center.

Media giants like Netflix and smaller production shops are increasingly leaning on the power of data and algorithms to influence the IP they greenlight. And Wall Street is getting bullish about an emerging class of startups that use historical data to make forward-looking inferences about new scripts’ prospects, a private credit investor recently told Insider.

Embracing data to help make predictions about whether projects are destined to succeed is a net positive, in Gosier’s view. Otherwise, what gets made in Hollywood “very much becomes just the subjective opinion of some very powerful gatekeepers,” he said.

FilmHedge gave Insider a look at the 18-page pitch deck it used while raising its $5 million Series A round and $100 million credit facility — check it out here.