Patreon, the creativity funding platform where fans are able to subscribe and fund their favorite artists or talents, has raised $60 million in a Series C funding round led by Thrive Capital and its existing investors Index Ventures, CRV, Freestyle and DFJ.
Musician and YouTuber Jack Conte launched the startup in 2013. “We will be scaling our team, building faster and building more – all to get you paid,” said Conte in a blog post announcing the financing. “There’s a great world coming for creators!”
In addition to these new funds, Patreon has managed to raise a total of $107 million to date.
In just four years this startup has managed to sign up one million patrons, who are funding 50,000 creators. With an average pledge of $12 per patron, the company claims it has paid $100 million to creators during its first three years as a business. This year it expects to pay out $150 million to its creators.
In this entire process of arranging funding for the creators through their fan bases (patrons), the company is functioning at a very low margin of just 5 percent. However, this low margin is the reason why Patreon has managed to attract a huge base of creators, as well as the Patrons. In comparison, YouTube pays only 55 percent to its creators.
“I want creators to feel understood by Patreon,” Conte said in the blog post. “I want all 80 folks who work here, and the many more to come, to feel your pain and to feel your joy. I want us to see your trouble, and I want us to grasp the intensity of your grit. This depth of understanding will take time, and while we may never truly arrive, I believe that the team has the charge and fire to get closer than anyone has before.”
Patreon has proved to be an effective platform for creators as a steady source of income. The creators are able to explore their creative side. A few creators are able to generate an income of $30,000 per month, while others are able to manage a few hundred dollars per month, which encourages them to pursue their passion rather than getting into something completely unrelated just to keep the fire burning at home.