The archive · Consumer Apps · Financial decision · 2013–2017
Patreon's $60M Series C at ~$450M bets fans pay creators directly
Jack Conte's 2013 bet that fans would pay creators monthly instead of relying on ads reaches 50,000 creators and a $60M round led by Thrive.
Patreon
What the business is
Patreon lets fans pay creators a monthly subscription for early or exclusive access to their work, passing 95% of payments through and keeping a 5% cut for itself.
Starting capital：$60M Series C announced 2017-09-19, led by Thrive Capital; TechCrunch's sources valued the company near $450M, and total funding reached about $107M.
How it started
Musician and videographer Jack Conte struggled to earn enough from his own work and found that one-off crowdfunding could not give artists steady income. He co-founded Patreon in 2013 with the mission of funding the creative class, arguing that advertising did not pay enough and that direct consumer payments had to become a bigger part of how art is financed.
What happened
By September 2017 Patreon hosted 50,000 creators and 1 million subscribers paying an average of $12 per month, was doubling in size each year and was on track to pay out $150M to creators, which meant Patreon itself earned only about $7.5M. TechCrunch learned that a Series C had closed, and on 2017-09-19 Patreon confirmed a $60M round led by Thrive Capital, with Index Ventures participating and existing investors CRV and Freestyle joined by new backer DFJ. The capital was earmarked for hiring beyond its 80-person team and recruiting more creators, while the low 5% rake stayed central to the pitch: YouTube and Facebook's Watch paid creators only 55% of ad revenue, so Patreon's 95% pass-through was the reason creators moved their audiences over.
No ending yet — it is still running.
Background
Patreon is the subscription platform where fans pay creators a monthly fee for early or exclusive access to their work. Its founding bet was that direct consumer payments, not advertising, would become the financial mechanism that supports art: illustrators, musicians, comedians and game makers could earn a reliable paycheck instead of chasing ad views.
Jack Conte started the company in 2013 after struggling to earn from his own music and video work. Kickstarter-style campaigns funded single projects but not careers, so he built a service where patrons pay an average of $12 per month and creators keep 95% of what comes in. The low 5% take was deliberate: it gave creators a financial reason to steer their audiences away from YouTube and Facebook, which paid out only 55% of ad revenue.
By September 2017 Patreon hosted 50,000 creators and 1 million subscribers, was doubling every year and was on track to pay creators $150M for the year. Its own revenue was only about $7.5M because of the 5% cut, which is why the Series C mattered. TechCrunch first reported the round at a valuation near $450M, and on 2017-09-19 Patreon confirmed raising $60M led by Thrive Capital, with Index, CRV, Freestyle and DFJ involved, bringing total funding to about $107M.
The money went to hiring and creator growth, but the coverage also flagged the open questions: how to moderate a platform that hosted political commentators like Chapo Trap House (earning over $82,000 a month) without sliding into hate speech, and whether discovery features that promoted popular creators would create an echo chamber.
What has to be true
- Patreon attacked a real gap: one-off crowdfunding paid for projects while ad platforms failed to pay most creators a living wage.
- The 5% rake and 95% pass-through made Patreon the rational home for creators leaving YouTube's and Facebook's 55% ad payouts.
- Monthly subscriptions created recurring revenue that compounded as creators moved their audiences over, doubling the platform each year by 2017.
- Strong unit economics were visible before the round: 1 million subscribers at $12/month and individual creators earning over $82,000 a month.
What can be applied
Let creators keep nearly everything and turn the economics into the marketing: the deliberately thin 5% rake worked as the reason fans and creators chose Patreon over ad platforms.
Aftermath
As of 2017-09-19 Patreon had confirmed the $60M Series C led by Thrive Capital and was scaling its 80-person team to recruit more creators and build paid tools on top of the 5% subscription fee. The platform counted 50,000 creators and 1 million subscribers, was doubling each year and was on track to pay out $150M in 2017, against only about $7.5M of its own revenue, so the bet still depended on growth outpacing the deliberately thin take.
Sources
- Patreon raises big round at ~$450M valuation to get artists paid
- Subscription art crowdfunder Patreon confirms $60M fundraise
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