Patreon, a service which allows fans to ‘tip’ creators every time they release a new piece of content, has just closed a fresh round of funding.
The company just raised $15 million in a Series A funding round led by Danny Rimer of Index Ventures, whose past investments include Dropbox, Soundcloud, and Skype. Reddit co-founder Alexis Ohanian and former PayPal president David Marcus are just a few of the other investors that contributed to the round.
The company has undergone significant growth over the past year, using a relatively small $2.1m seed round to build their offering into a service that some of the most popular channels on YouTube have come to rely on.
Creators like action video makers Corridor Digital and science/discovery channel SmarterEveryDay have made the service a key part of their business model, with fans collectively pledging to give well over $3,000 every time they release a new video.
The fresh round of funding will help the company improve its existing service while also adding new features, such as a mobile app, as they continue to seek out new avenues for growth. The company recently signed the lease on a brand new, larger, office space in San Francisco; with co-founder Jack Conte confirming that any empty space will probably be filled quickly as they plan to double their headcount of 11 employees before the end of 2014.
Patreon has paid out over $2 million to the 25,000 content creators that use the service since launching just a year ago, and it’s great to see such a creator-friendly service doing so well. However, it remains to be seen whether this investment will pay off for their investors.
Just last month, YouTube announced they are planning to offer creator crowd-funding directly from their own platform. It seems unlike acquisition-happy Google not to offer Patreon a buyout unless the tech giant plans to run them over; so either these investors have just wasted $15m, or YouTube may just have a fight on their hands for domination of the creator crowd-funding market.