Following up on Swiggy, we seek to shine our spotlight next on Patreon, another game-changer, just in another field—for artists and creators worldwide. Just as Swiggy transformed food delivery, Patreon has reshaped how creators are supported, paving the way for sustainable, community-driven funding.

Co-founded by Sam Yam and Jack Conte

Co-founded in May 2013 by developer Sam Yam and musician Jack Conte, Patreon is a platform that allows individuals or ‘patrons’ to donate money to a creator of their liking who posts works of art, in forms such as videos, songs, paintings, webcomics, and podcasts, all while being granted exclusive content and benefits. Conte, a YouTuber at that time, was looking for patrons himself as a way to monetize his videos which garnered millions of views but barely made money due to seemingly broken YouTube content production economics.

Early Days as a Start-up

Investors realized the need when Conte pitched his robot music video story: he hand-built a robot for his music video for over 3 months, working 19-hour days. To this day, the ad revenue for that video is just around $1,000 with over 2.5M views.

Jack scoured for YouTubers and reached out to 40 of them, only to be rejected by all. Once creators saw the effectiveness of Patreon in making them money, interest in it grew exponentially.

Patreon signed up more than 125,000 patrons in its first 18 months. In August 2013, the company raised $2.1 million from angel investors and venture capitalists. It raised a further $15 million in a Series A round and $30 million in a Series B round in 2016. Till now, the company has raised over $400 million and has yet to go public.

Business Model and Sources of Revenue

Starting a Patreon is free for creators and their fans. Donators pay a fixed monthly amount or make payments based on new content releases. They can cancel payments anytime and receive membership benefits like exclusive content or behind-the-scenes access depending on their pledge tier. Some creators also use Patreon with platforms like YouTube, offering exclusive content or extended cuts of videos to patrons. Patreon takes a commission of 5-12% on pledges and charges payment processing fees. Its annual revenue is anywhere between $50 to $75 million.

Patreon hosts over 8 million monthly active patrons and around 250,000 active creators. In May 2022 alone, the website got around 260 million visits. Creators on Patreon have been paid over $3.5 billion to date.

Though Patreon is similar to other crowdfunding websites like GoFundMe, it provides business tools to run a subscription service as a membership platform. Patreon is an option for artists or creators with long-term projects who want sustainable funding from supporters rather than short-term financing.

Challenges

Patreon faced obstacles like payment processing issues, high fees, content moderation concerns, competition, and scalability. To overcome these, it developed an in-house payment system, adjusted its fee structure, clarified content policies, and expanded its technical infrastructure. The platform also provided better creator tools, localized for global markets, and focused on security by employing measures like two-factor authentication, CAPTCHA verification, and the use of DataDome which has helped reduce account takeovers by 93%, stop scrapers, and identify DDoS attacks early. By diversifying its services, offering educational resources, and adapting to creator needs, Patreon solidified its position as a key player in the creator economy.

Conclusion

The platform empowers individuals to follow their passion, take creative risks, and build loyal communities. Creators can make what excites them most without worrying about feeding an unpredictable, ever-changing algorithm. Whether you’re a budding artist or a seasoned content creator, Patreon offers the tools to turn creativity into a thriving business, living up to the slogan: “Changing The Way Art Is Valued”.

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