Crowdfunding platform Patreon announced a new fundraising round of $ 155 million on April 7. It comes less than six months after the previous round table, which amounted to $ 90 million.
This fundraising was led by the new investor Tiger Global Management, with the participation of the Woodline Partners fund and the platform’s historical investors. It allows Patreon to triple its valuation, which had already jumped in October 2020, then amounting to $ 1.2 billion. Today it has reached $ 4 billion.
The funds raised will be used for the development of the platform’s services, in particular new content reading tools, as well as to continue its international expansion. The start-up is targeting the European Union in particular and launched itself in several countries, including France, last October. They could also make it possible to finance new acquisitions.
An innovative financing method
Patreon was premiered in 2013 by musician Jack Conte. It is an online platform that allows artists and content creators to finance themselves directly from their fans through subscriptions that give access to exclusive content in exchange for a recurring payment. The sums involved are generally between one and one hundred dollars per month.
This is very different from crowdfunding platforms like Kickstarter, which do not allow a project to be funded regularly and over the long term, or from YouTube and Twitch, whose income comes mainly from advertising and sponsorship operations. The Patreon business model is based on a commission levied on payments to artists. It varies between 5 and 12% depending on the price of monthly subscriptions.
A success story accelerated by the pandemic
Patreon is still not profitable for the moment, but it has experienced significant growth over the past year. In March 2020, it welcomed more than 30,000 artists. One year later, more than 200,000 creators are present on the platform. They earn $ 100 million per month thanks to 7 million sponsors, according to a recent press release. However, only 2% of creators can live solely on the remuneration of their activity on Patreon.
The start-up has seen the number of competitors multiply for two years, but for the moment it remains the benchmark of the genre. Two of them stand out: Ko-fi, which takes no commission and is primarily used to make one-time donations (with limited functionality), and OnlyFans, which mostly tends to be used to monetize snaps or videos for adults. Specific niches which do not overshadow the pioneer of the sector.