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Patreon raises big round at $450M valuation

techcrunch.com

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Re: Patreon raises big round at $450M valuation

#41

Post by wongarsu »

chrshawkes wrote: post #33
falcolas wrote: post #24

Earlier quoted context omitted.

Apple takes 30%. So does Google. Kickstarter takes 5%. Many online stock trading firms take somewhere around 10-15%. That fairly well justifies the qualifier of "tiny" in today's world. Given that the basic cost for processing credit cards and other such minutia is already around 2%, the benefit of not having to worry about chargebacks, fraud, or PCI compliance... worth that extra 3% IMO.

Google takes more than 30% on YouTube earnings, it's actually 45%.

Pretty sure he was referring to the Google Play Store, where Google takes 30% of everything (including in-app payments)

Re: Patreon raises big round at $450M valuation

#43

Post by buro9 »

IshKebab wrote: post #28
joelthelion wrote: post #5

That means they're going to expect a lot of revenue. Which they plan to take on money that people give freely. I don't see that ending well.

They have a fee of 5%. Let's assume they have a price/earnings ratio of 20, that means they expect people to spend something like $450m/year on Patreon. According to Wikipedia they are at around $150m/year already. I think it is totally feasible that they could increase that to $450m/year and not have to increase their 5% fee. Seems like a reasonable valuation to me.

It is 5% on top of payment processing, and averages around 10% for content publishers.

I keep telling people just to use a PayPal Donate button.

Unless you're in the top 1% of people on Patreon, you would do better just ensuring that more of the donations that exist ends up in your pocket.

If Patreon isn't delivering more donors than your content and self-marketing can attract... you are losing out.

Re: Patreon raises big round at $450M valuation

#44

Post by jcdavis »

IshKebab wrote: post #28
joelthelion wrote: post #5

That means they're going to expect a lot of revenue. Which they plan to take on money that people give freely. I don't see that ending well.

They have a fee of 5%. Let's assume they have a price/earnings ratio of 20, that means they expect people to spend something like $450m/year on Patreon. According to Wikipedia they are at around $150m/year already. I think it is totally feasible that they could increase that to $450m/year and not have to increase their 5% fee. Seems like a reasonable valuation to me.

Revenue != Earnings.

They would need a lot more than $22.5m in revenue to generate that much profit

Re: Patreon raises big round at $450M valuation

#45

Post by stephenson »

egypturnash wrote: post #39
outoftacos wrote: post #35

Oh god, now they're trapped in the endless useless growth demand cycle. Too bad, I enjoy supporting a few artists on there and it's just a matter of time until this hurts them.

Seriously, I enjoy having my comics supported by my fans there and I'm not looking forwards to them having to Make A Profit.

They should help you make a profit, but not make one themselves?

Re: Patreon raises big round at $450M valuation

#46

Post by wongarsu »

nilved wrote: post #30
falcolas wrote: post #24

Earlier quoted context omitted.

Apple takes 30%. So does Google. Kickstarter takes 5%. Many online stock trading firms take somewhere around 10-15%. That fairly well justifies the qualifier of "tiny" in today's world. Given that the basic cost for processing credit cards and other such minutia is already around 2%, the benefit of not having to worry about chargebacks, fraud, or PCI compliance... worth that extra 3% IMO.

Nobody should be okay paying Apple or Google 30%. That is highway robbery.

They essentially have a monopoly on App sales on their respective platforms.

At least in Google's case, antitrust-lawsuits in Europe and Russia are slowly working on making it possible to create viable competition to Google's Play Store. Maybe we'll see prices fall in the next decade or so.

Re: Patreon raises big round at $450M valuation

#47

Post by olejorgenb »

dandermotj wrote: post #13

That's a P/E of 60... Also this: > In exchange, Patreon takes only a tiny 5% cut. I hope this is sarcasm, because if I had to pay 5% to make any other transaction I'd be fuming. With a marginal cost of facilitating a new patron near zero, I don't think creators or patrons will suffer this as Patreon grows.

The 5% is on top of visa/mastercard cost IIRC, so it's actually a bit more.

Re: Patreon raises big round at $450M valuation

#48

Post by psadri »

IshKebab wrote: post #28
joelthelion wrote: post #5

That means they're going to expect a lot of revenue. Which they plan to take on money that people give freely. I don't see that ending well.

They have a fee of 5%. Let's assume they have a price/earnings ratio of 20, that means they expect people to spend something like $450m/year on Patreon. According to Wikipedia they are at around $150m/year already. I think it is totally feasible that they could increase that to $450m/year and not have to increase their 5% fee. Seems like a reasonable valuation to me.

Series C investors hope to multiply their investment. So the goal is much higher.

Re: Patreon raises big round at $450M valuation

#49

Post by sixdimensional »

I remember the first time I saw a music video by Jack Conte on YouTube, way before he started Patreon. He did a bunch of cool music videos (example https://youtu.be/lBUUOJpFg9Y) . Also, his work with Pomplamoose was pretty awesome.

I remember hearing him talk about his idea for Patreon on some of those YouTube videos. He seems like a pretty nice guy, so I am super excited for him to hear that Patreon has been such a great success!!

Let's hope they can continue their mission and keep taking it to positive places from here!

Re: Patreon raises big round at $450M valuation

#50

Post by TaylorAlexander »

stephenson wrote: post #45
egypturnash wrote: post #39

Earlier quoted context omitted.

Seriously, I enjoy having my comics supported by my fans there and I'm not looking forwards to them having to Make A Profit.

They should help you make a profit, but not make one themselves?

They should make a profit. What we don't want is to spoil the nice service with desperate attempts to earn enough profit to satisfy investors.
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