• The media company Superplastic is using its Instagram and TikTok accounts to drive millions in toy and apparel sales.
• Its roster of virtual characters have also been able to score brand partnerships with companies like Gucci, Red Bull, and Trojan.
• The company aims to make money from direct-to-consumer sales, brand deals, and TV and film projects.
• Visit Business Insider’s homepage for more stories.

Hollywood’s tried-and-true practice of selling merchandise to boost engagement for its movies and TV shows — and make tons of money —  is now being adapted to the influencer era.

The upstart toy company Superplastic is using Instagram and TikTok to promote its high-end toy and apparel line with a set of virtual social-media stars. 

Its roster of main characters — Janky, Guggimon, Dayzee and Staxx — have amassed millions of followers across Superplastic’s various social-media accounts since they started posting roughly a year ago. Created by a team of artists and animators (Superplastic now has 25 employees overall), the characters look like bunnies and cats, though the company hasn’t identified them as such.

The quartet and an array of other minor characters that appear in their posts sell as limited edition toys for adults on Superplastic’s website. The company said it sold millions of dollars worth of designer toys and apparel last year, and more than $10 million worth of products since it launched.

“Because the characters have so many followers, people are just buying their stuff,” said Paul Budnitz, the company’s founder. “The shutdown seems to have helped online sales so much, so that’s been really useful and it’s given me the space to say no to anything that we’re not really excited about.”

While other companies that have created virtual characters for social media have tended to focus on traditional influencer revenue sources like brand deals, Superplastic’s steady toy and apparel sales have made the company’s social accounts more of a promotional tool for direct-to-consumer sales rather than a channel for brand partnerships.

Its approach falls in line with a broader trend in the influencer industry (and media world generally) toward revenue diversification. Top social-media influencers like Brent Rivera, MrBeast, and Addison Rae Easterling have moved well beyond content creation into direct-to-consumer businesses like hamburgers and makeup sales (and traditional media).

Superplastic is similarly eyeing a business strategy that includes a mix of product sales, brand deals, and TV and film projects that live outside of Instagram. 

Other companies in the influencer industry have succeeded in conquering traditional media, toy sales, and social media all at once. The top-earning YouTube star, Ryan Kaji, leveraged his YouTube fame to launch a Nickelodeon series and sprawling toy empire. 

“Superplastic came out of the idea of … what if we could just skip the whole studio system and use social media to make our characters famous on their own and then once they were well known we could back into traditional media,” Budnitz said. “We could sell product. We could work with celebrities. All the stuff you can do with an influencer you can also do with an animated character.”

Unlike human influencers, Superplastic’s digital stars have been able to continue to post content without worrying about social distancing during the pandemic, a position that has benefited other virtual influencer startups as well.

‘The timing of the pandemic has been advantageous for our company,” Budnitz said. “Our characters have followers like normal influencers but they can’t get sick, so we can actually do shoots.”

Read more: Some brands are turning to computer-generated influencers who can be ‘anywhere’ during a pandemic

Superplastic has raised $16 million to date from a series of institutional and celebrity investors including Google Ventures (GV), Craft Ventures, and Justin Timberlake. Bill Lee, the general partner at Craft Ventures who led Superplastic’s Series A fundraising round, described Budnitz as “Salvador Dalí meets Disney.”

“He is a visionary that sees stuff before other people and is an artist that won’t degrade his work for the pursuit of money,” Lee said of Budnitz in a statement to Insider.

Building a diversified media business, starting with toy sales and irreverent Instagram posts

Like many of their human peers, Superplastic’s influencers tend to court controversy.

Their characters drink and smoke in videos, light each other on fire, and occasionally thrash brands like Amazon that they don’t like.

The company has attracted partnerships with adult-focused brands. In March, Superplastic worked with the condom brand Trojan to dress up one of their influencers in a full-body length contraceptive. Last month, Gucci enlisted two of Superplastic’s influencers to promote sneakers on Instagram.

But its broader influencer strategy has mirrored that of other troublemaking creators like the Sway Boys, who have recently turned to angel investing and direct-to-consumer sales rather than focus on one-off brand deals.

Sponsored posts are often a key source of income for social-media influencers. But the types of brand deals open to a creator vary widely depending on their audience, content style — and whether they’re human or not. 

Like its influencer and media peers, Superplastic understands the importance of diversifying its businesses so as not to rely on a single revenue source. Its long-term vision is to expand from toy sales and Instagram and TikTok skits into traditional media platforms like TV and movies. But the company wants to maintain full control of its characters regardless of where they appear.

Budnitz’s decision to initially focus on social media stems from his general distrust of Hollywood. He signed a development deal with Paramount Pictures to make movies for his last toy company, KidRobot, in 2008, but the project fell through.

“Hollywood is so dysfunctional traditionally,” he said. “The way product and especially social media and traditional media interact are usually siloed at these big studios. When you see something that actually puts all these pieces together, I think that’s what’s going to ultimately make us a next-level entertainment studio.”

Budnitz said he’s turned down a few opportunities to bring Superplastic’s characters to other platforms, including now-defunct Quibi, but is actively considering other media deals this year. 

“The vision isn’t small,” Budnitz said. “You have to think about it as more like the Avengers and Marvel or the original Disney World with Mickey, Donald Duck and all the rest.”

Read more: Inside YouTube star Brent Rivera’s content company, which created a superhero for TikTok and wants to become the next Disney Channel