Patreon Raises $60 Million to Take Membership Funding Model to a ‘New Level’
The six-year-old company expects to pay out $1 billion to creators, including many musicians, by the end of 2019.
Patreon — the membership funding platform that lets fans support musicians like Pentatonix and Amanda Palmer with monthly payments — has raised $60 million in late-stage funding from investors, co-founder and CEO Jack Conte announced Tuesday (July 16).
The Series D funding round is led by Glade Brook Capital, whose portfolio has included Snapchat and Uber, along with existing investors Thrive Capital, Initialized, Index Ventures, DFJ, Freestyle, Charles River Ventures and Otherwise. Serj Tankian and comedian Hannibal Buress are also among newly-added investors, and Patreon will now work with Glade Brook to fill a new board seat with a mutually agreed-upon member.
“We envision a future where creative people everywhere can do their best work with the support of their biggest fans, and where creativity is valued for the joy, inspiration, and connection it brings,” Conte wrote in a blog post declaring the new funds would take “creator memberships to a whole new level”
He continued, “We’re so grateful for the opportunity to build this future as a thriving independent company, together with creators and patrons.”
The six-year-old Patreon looks to carve out a membership niche in an increasingly cramped market for crowdfunding sites, where similar companies have met varying fates in the music space. Direct-to-fan music platform PledgeMusic recently came under fire for missing thousands of dollars in payments to artists, and now appears headed for bankruptcy.
But unlike PledgeMusic, IndieGoGo and the long-running Kickstarter and GoFundMe — where people mostly raise money for singular projects, paid out in one-time transactions — Patreon differentiates itself by functioning as a subscription. On the site, supporters pledge a few bucks to a creator per month or per “thing” released. The idea is to provide a more predictable stream of income for creators on the platform, which range from musicians to video creators, podcasters, writers and visual artists.
Launched in 2013, Patreon raised $2.1 million of seed funding, adding another $15 million in mid-2014. By the end of 2019, Conte says the company expects to have paid out more than $1 billion to its worldwide network of creators, which have included Palmer and Pentatonix along with Zola Jesus, Jacob Collier and Ben Folds.
Conte plans to use funds to give creators greater customization of their profile pages, easier ways to deliver Patreon-only content and updates to its “Merch for Membership” reward system, along with revamping the mobile site for members. The cash will also help fuel the company’s international growth by supporting new currencies, languages and payment methods, building on its recently-opened offices in Porto, Portugal, and Dublin, Ireland.
“Fans love membership because they get connection, access, exclusive merch, and content they can’t get anywhere else,” Conte wrote. “We’re building better ways for creators to deliver digital benefits like secure audio, video, and image galleries.”
In a statement, Initialized Capital managing parter Alexis Ohanian credited Patreon for guiding a “second renaissance of creative work.” The firm also has investments in Genius, Reddit and Instacart, among others.
“With almost $1 billion paid out to independent artists, this is only the beginning, because until now this platform has largely been under the radar of popular culture,” he added. “That’s all changing and we couldn’t be more excited about what this means for the creative class.”