Patreon Membership Platform Raises $60 Million
The startup, which allows content producers to offer fans perks in exchange for recurring payments, has become popular with YouTubers, podcasters and musicians.
As YouTube and Facebook roll out new tools to help creators make money on their platforms, startup Patreon has raised a round of funding to give that talent off-platform monetization opportunities, too.
The six-year-old company on Tuesday announced that it has closed a $60 million funding round led by Glade Brook Capital. Existing investors including Thrive Capital, Index Ventures and DFJ participated in the round, which was also opened up to talent like comedian Hannibal Buress and musician Serj Tankian for the first time. Patreon has raised nearly $170 million to date and, after its last funding round, was valued at $450 million.
Founded by Jack Conte and Sam Yam, Patreon is a membership platform where talent of all stripes — from YouTubers to podcasters to musicians — can offer perks to their fans in exchange for recurring payments. More than 100,000 creators now use its tools, and by company projections, it expects to pay out $1 billion to its partners by the end of the year.
In a blog post announcing the funding, CEO Conte said that he and Yam started Patreon "in response to a broken system where creative work on the internet was being used to funnel massive profits to big companies without valuing or rewarding the creators." Its terms, 5 percent to 12 percent of monthly income earned, are more favorable to creators than platforms like YouTube, which typically takes around 45 percent of ad revenue.
YouTube and Facebook have both introduced monetization features that expand beyond pure ad revenue share agreements. YouTube, for instance, offers memberships, and during VidCon announced plans to expand the program to multiple tiers. Facebook on July 9 said it would expand its fan subscriptions program and add a tipping feature known as Facebook Stars to live streams.
Despite product updates like these, Conte wrote in his post, "other companies still continue to prioritize dollars over creators." He added, "Patreon fulfills a unique need for creators, leveraging the deep, personal connections they've fostered with their fans to get them paid for the value of their work."
He said that the company would use the funding to fuel its global expansion (including a recently opened office in Portugal), rethink its mobile experience and expand its merchandise membership feature.