Patreon is a niche player in the online content creation market. Instead of using the platform to monetize content, creators get direct contributions from their audiences. Patreon earns a commission for each contribution. This business model has many investors asking how to purchase Patreon stock.
Patreon was created in 2013 by a web developer and musician. They were both looking for ways to monetize YouTube videos, and they believed other content creators would be interested in the same service. Within a year of its creation, Patreon was growing rapidly and was now distributing more than $1 million per month to creators.
What is Patreon?
Patreon is a new way to monetize content. YouTube and other ad-based platforms such as YouTube have large audiences. They also have constantly changing monetization algorithms. Patreon allows creators the opportunity to offer their audience ongoing memberships. Members can offer monthly contributions or make a contribution every time the creator releases work.
Patreon offers Lite and Pro service tiers and charges between 5% and 12%commission. The average commission rate for Patreon is 8.5%.
Patreon lets content creators bypass YouTube’s increasingly complicated monetization process and work directly with their audience. This system rewards creators with niche audiences or highly dedicated audiences rather than the large market that many host sites favor.
Patreon, creators claim, allows them to concentrate on creating and not keeping track of popular tastes or policies. It also provides consistent revenue. It allows creators to keep ownership and control of their work through direct connections to the audience. There are no publishers, producers or platforms.
Patreon is the dominant platform for its business, and it faces very little competition. Direct competition comes from crowdfunding platforms such as Kickstarter, which tend to be more focused on single-project funding, but traditional platforms such as YouTube. Patreon has 10 patents.
When Will Patreon Hold its IPO
During the 2021 IPO boom there was much discussion about Patreon IPOs. But that conversation has since died.
Patreon declared that an IPO was “on-the table” in October 2021. Some analysts suggested that an IPO might take place by the end of 2021. This did not happen, probably because of the inhospitable market for IPOs, which left many companies unable to offer and causing them to delay their IPOs.
Although it is unclear when Patreon will go public (a large amount of venture capital funding means that this is likely), the investors who have invested in Patreon’s growth rate and their desire to exit the Company’s future strategies suggest that they will.
The IPO market is currently frozen and the pre-IPO share market favors over buyers. If you are confident in Patreon’s future it might be a good idea to invest in pre-IPO shares if there are any.
What do we know about Patreon’s fundamentals?
Patreon is an independent company that is not required by law to file audited financial statements. Although there is a lot of information available about Patreon’s finances and business, detailed information can only be found when Patreon files an official registration statement.
Patreon served 216,000 creators who had at least one patron as of January 2022. The total number was 7 million. The creators earned $100 million per month on 2 million individual pledges. This suggests that the average monthly pledge size was $50.
Patreon’s 2021 annual revenue was $160 million. The Company announced its plans to double its size by 2022. Patreon plans to launch its own native video platform and new data options. The company also intends to revamp the billing system and make other improvements. Patreon plans to increase its workforce from 400 in 2021, to 1000 by 2022.
What we don’t know
These numbers are deduced or sourced from company statements. They are not based upon audited financials. We can make deductions on revenue using figures for the average commission and contributions, but we don’t have any data about costs, margins or profitability.
These factors can only be assessed when Patreon files an official registration statement.
Patreon Financing
Patreon has raised $413million in venture capital funding. Patreon is valued at $4 billion. The April 2021 funding round raised $155 million. Tiger Capital led the round, along with Woodline Partners, Glade Brook Capital and New Enterprise Associates.
