Patreon, widely used by podcasters and musicians, reaches unicorn status with fundraise

Patreon, the patronage crowdfunding platform, is now valued over $1-billion, the threshold for “unicorn” status — a popular venture-capital term for companies which stand at a pinnacle in their niches.

The milestone is publicized in the wake of a recent fundraising round which yielded $100-million based on a valuation of $1.2-billion. The privately held company was founded in 2013 and has 200 employees.

Patreon’s model evolved from the Kickstarter crowdfunding method. While Kickstarter and others like it raise single clumps of money for starting an enterprise or building a commercial product, Patreon generates monthly pledges from fans of ongoing creative projects. It is a well-matched model for podcasting on a regular schedule, and for musicians also. Podcasts are atop the site’s navigation menu. 

Podcasters often offer exclusive content to justify the monthly donations (the platform can provide a private RSS feed), but for some producers it is more like a monthly tip jar which supports the normal production schedule. Well recognized podcasts can be found there. Welcome to Night Vale has 3,652 patrons paying $5, $10, or $15 each month (do the math) for special access and gifts. Snap Judgment, produced by WNYC, has 534 patrons dishing out $18 or $25 per month.

The value proposition of Patreon goes beyond dollars, and is foundationally about getting connected with listeners and building loyalty. But the dollars don’t hurt, not matter where a podcast lives in the pyramid of audience development and advertising revenue. Here is how the Patreon pitch balances it: “Get to know your most loyal listeners and give them a place to connect, build community, and engage more deeply with your show. Deliver exclusive episodes or bonus content, and establish a reliable revenue stream beyond ads.”

Brad Hill