Cameo fell from a $1B valuation to a $100K settlement it said it could barely afford

Cameo, the app that sold personalised celebrity video messages for a 25% cut, was valued at $1 billion in March 2021 after a $100M Series C, with investors including SoftBank, Google Ventures and Kleiner Perkins. The novelty then faded and sales flatlined; by March 2024 a Series D cramdown round raised $28 million at a valuation under $100 million, a 90% fall, according to Fortune.

In July 2024 a consortium of 30 state attorneys general reached a settlement with Cameo over Cameo Business, a product that let celebrities endorse products and businesses. Videos on it did not properly disclose that they were paid endorsements, and lawyer Randi Singer noted there appeared to be no guidelines or guardrails for endorsements. The states set a $600,000 penalty.

Cameo submitted audited financials from 2021 and 2022, and later figures from October 2023, to show it could not afford that amount, so only $100,000 is payable. If it breaks the rules again the remaining $500,000 is due, which an NYU law professor said would presumably send it into bankruptcy. The company must label endorsement videos clearly and give celebrities terms requiring them to follow the law, and is on three years' probation.

$600,000 penalty cut to $100,000 for inability to pay, with $500,000 due if it breaks the rules; valuation down 90% to under $100M

Cameo Business let brands request paid endorsement videos, but the videos did not clearly show they were ads.

A lawyer told Fortune it did not appear Cameo had guidelines or guardrails on endorsements, beyond its terms of service and the celebrity's own discretion.

Celebrities did not post the content themselves, which a lawyer said made them less likely to be careful about disclosures.

Cameo's growth stalled after the pandemic as the novelty wore off, which left it unable to pay the full penalty.

A marketplace that sells endorsements owns the disclosure problem. Cameo had no guardrails, and the penalty was reduced only because the business had already shrunk.

The settlement requires clear and conspicuous labelling of endorsement videos and terms of service obliging celebrities to follow applicable law. Because of Cameo's finances, the states secured only $100,000 now and placed it on three-year probation; the remaining $500,000 would be due within 91 days if it went bankrupt or broke the rules again. Cameo said it had cooperated and remained committed to helping customers source legally compliant endorsements.