Patreon is considering going public as soon as this year, The Information reports.
What’s Patreon? It’s a platform that allows online creators (podcasters, musicians, other artists, etc.) to “receive direct financial support from fans.”
A Growth Story: The discussions come after a period of rapid growth for the seven-year-old company. The pandemic drove new demand for the online platform, roughly doubling the size of its business year-over-year in recent months.
- Patreon recently surpassed $100 million in annualized revenue, which puts it in line with other creator platforms such as newsletter provider Substack and adult entertainment site OnlyFans.
- Patreon’s increased revenue reflects a growing trend for consumers to sidestep advertisers and pay for content directly.
“A public listing this year would follow Patreon’s recent $1.3 billion post-money valuation in September, when the company raised $90 million of funding from investors including New Enterprise Associates and Wellington Management. At the time, CEO Jack Conte said, ‘in a few months, creators will be making over $1 billion a year from their patrons on Patreon.’”
Figuring It Out: Patreon has met with banks and been approached by SPACs, though it doesn’t prefer to go to the market through a blank-check merger. If it does go public, it could also pursue a traditional IPO, a direct listing or a hybrid.
- There’s still a lot to figure out for the young company, which still burns cash.
Of the three creator payment platforms, Patreon is the one I’m most interested in. It’s flexible, allows many media types, and has an ambitious management team focused on rolling out more features that empower creators.
Substack, on the other hand, is very reliant on paid newsletter writing, which is popular these days, but definitely subject to a future decline in popularity. How many paid newsletters can one read every day? I am very thankful you enjoy reading Morning Cents.
OnlyFans undeniably skews towards adult content, which could be a really good business model, but obviously comes with ethical concerns, especially for institutional investors.