Just three months after launching, Patreon Inc. has landed nearly $2.1 million in financing from venture firms and angels.
Freestyle Capital led the venture round, which also included investments from Charles River Ventures, Atlas Venture, Rothenberg Ventures and SV Angel. In addition, the tiny Menlo Park, Calif., startup received angel funding from Reddit Co-Founder Alexis Ohanian, Tyler Willis and Y Combinator Partner Garry Tan.
Founded by musician Jack Conte and serial entrepreneur Sam Yam, Patreon lets fans contribute as little as $1 in order to become patrons of the arts. The site is currently processing about $100,000 of pledges a month on behalf of 2,300 artists who have signed up on Patreon. Although many are musicians, a melange of comic book artists, photographers, game developers, illustrators and video creators have also piled into Patreon's platform to raise money. "We originally had musicians and YouTube creators in mind, but it's become a tool for anybody who's creating stuff," Conte said. "There are all sorts of communities using Patreon that I had no idea existed."
Here’s how Patreon works. Fans can elect to donate as little as $1 for every song or video an artist produces. If the artist creates 6 videos a year, a fan donating $1 per work would give $6 a year. Fans pay nothing if the artist does not release any works. The idea is to provide a revenue stream for artists who aren’t creating large, flashy projects for Kickstarter campaigns, but are slowly cranking out one video, song or comic on a regular basis.
Conte, a 29-year-old independent musician who is also half of the Pomplamoose band, came up with the idea as a way to supplement the income from ads on his original YouTube videos. He and Yam, roomates during their freshman year at Stanford University , built the site and launched it in May. Conte's own Patreon page showed that he has 835 patrons who collectively pledged to give him $6,171 for every music video he produces. That's an average of $7.39 per patron. Sitewide, the average pledge is around $6 per patron, per artist, Conte said.
Yam founded AdWhirl, a mobile ad platform purchased in September 2009 by AdMob, which in turn was sold to Google in November 2009. He also founded ChompOn, a technology platform for group-buying flash sales, in 2010.
Yam and Conte, who currently are the company's only employees, plan to use their newfound capital to hire engineers and build a mobile app for the service, which is now Web only.