Cameo became a billion-dollar unicorn by taking 25% of celebrity video messages, but collapsed when it didn't disclose that stars were being paid to promote brands. Top celebrities left, revenue tanked, and a $600,000 lawsuit settlement the company couldn't afford wiped out its valuation.
Cameo went from a billion-dollar unicorn startup to receiving a $600,000 court settlement that it can't afford to pay. Here's what happened. The concept of Cameo is fantastic. You love it because you gain access to athletes, celebrities, all of your idols that will record you a special message for a fee. Hi, Joshua. You are Chuck Norris approved. Investors love it because Cameo takes 25% of the sales. And with a birthday message from Bo Jackson starting at $450 or a pep talk from Caitlyn Jenner costing $2,500 a pop, it's no wonder why investors flock to the scene. Google, SoftBank, hell, even Tony Tony Hawk go all in investing in Cameo, and the company absolutely explodes to a billion dollar valuation by 2021. But since then, their value has tanked by over 90%. What gives? It turns out it wasn't just people like you and me using the service. Tons of companies were flocking to the scene to have celebrities promote their products, and Cameo makes a big mistake— they didn't disclose that these were paid endorsements. So A-list celebrities immediately leave the platform, and there's no money to be made on D-list celebrities. So Cameo gets sued and has to reach a settlement that completely wipes them out.
