Patreon Inc., an online platform that connects musicians and other creators with their fans, raised US$ 155M at a valuation of US$ 4 billion in its latest investment round on 7 April 2021. Its valuation more than tripled since September last year.
Investors: The funding round was led by new investor Tiger Global Management, with participation from Woodline Partners and existing investors, Wellington Management, Lone Pine Capital and New Enterprise Associates. Patreon had raised US$ 90 million in September 2020, bringing its valuation to more than $1.2 billion.
Founded in 2013 by Jack Conte and Sam Yam, Patreon is a membership platform that makes it easy for artists and creators to get paid. The platform enables content creators and artists to be able to fund their work. It works as a communication platform that connects users and makes various accessible content, including videos, photographs, pictures, artworks, projects, data, graphics etc. It is a great space for creators who want to make a living out of their passions. Patreon aims to empower a new generation of creators and support them for each work they create. The company is headquartered in San Francisco, US.
The Business Model: Patreon has a subscription-style payment model wherein fans pay their favourite creators a monthly amount of their choice. In exchange, they get exclusive access, extra content, or a look into the creative journey of the creator. Therefore, the creators can retain their creative freedom while earning what they deserve for their hard work and fans can rest easy knowing that their money is going directly to creators for creating more of what they love.
Patreon isn’t profitable yet. It offers three levels of membership for creators and takes a 5% to 12% commission of the monthly income earned, plus a payment processing fee. Being an international platform, Patreon has added several languages and currencies to widen its reach.
What the CEO has to say: “There was already a changing tide in the way creators were connecting with their audiences. The pandemic accelerated it. Patreon has seen rapid growth in the past year and now has more than 200,000 creators supported by some seven million fans.” — Jack Conte, Patreon’s chief executive and co-founder.
The COVID-19 pandemic has given a significant boost to the creator economy. In the face of event cancellations, lockdowns and social distancing, online platforms like Patreon, Baron App Inc.’s Cameo and OnlyFans have emerged as winners by giving people access to entertainment, while providing artists and creators a platform to continue their creative work and make money.
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