The San Francisco-based crowdfunding company that enables fans to pay artists for their work said with the new cash it is valued at $1.2 billion. Patreon said it plans to use the financing to expand internationally and boost its tools for developers.
In the video announcement of the news, former YouTube musician Jack Conte, Patreon’s CEO, said he has kept the company’s financials private until now because he didn’t want the focus to be Patreon.
“I wanted to make it about our creators ... it’s a significant moment and I do want to give it the gravity it deserves,” he said. “This level of belief in Patreon is proof ... that the world is changing. The stigma of the starving artist is going to fade away.”
In 2013, Conte was looking for a way to cash in on the millions of people who loved his videos. But his bank account didn’t have much to show for it, according to Patreon so he crafted a website that would allow fans to pay him directly. He brought the idea to his college roommate and Patreon Co-Founder Sam Yam. The two of them launched the site in six weeks.
Today, the startup has 6 million subscribers for more than 200,000 artists who pay commissions of between 5 and 12 percent monthly. Collectively artists have earned $1 billion directly from fans, according to the company.
“Moving forward, creators from all over the world will be earning at least $1 billion a year on Patreon,” Conte said in a blog post.
The new funding will focus on helping creators grow their audience with search discovery tools, continuing the company’s global expansion with support for more currencies and “enhancing the patron experience,” Conte wrote.
Conte expects the company will update its messaging features to allow patrons to communicate with each other, as well as more opportunities to “physically show support of a creator in the form of more merchandise,” according to Conte.
The latest funding round was co-led by New Enterprise Associates, the Maryland-based venture capital firm, and Boston’s Wellington Management along with new investor Lone Pine Capital, a Connecticut-based hedge fund.
Earlier this year, Wyatt Jenkins, senior vice president of product at Patreon, told PYMNTS the company was a much better value than the competition.
“On Patreon, you take home 85 [percent to] 90 percent [of patrons’ funds] based on which of our plans you choose,” he said. “Any other channel, like Spotify or YouTube or Facebook, you’re getting fractions of a penny.”