Patreon

Whatnot

Patreon

Patreon takes a percentage of every payment processed through the platform — 5% on the Lite plan, 8% on the Pro plan, and 12% on the Premium plan. Each tier offers progressively more features: merch integration, team accounts, priority support, and dedicated partner managers.

On top of the platform fee, payment processing fees (typically 2.9% + $0.30 per transaction) are passed to either the creator or patron depending on the plan. The combined take rate means Patreon captures roughly 8-15% of the money flowing through the platform.

The business scales beautifully. More creators attract more patrons.

More patrons increase creator earnings. Higher earnings attract more creators.

And Patreon's cut grows proportionally with every dollar processed. Annual payment volume exceeded $3.5 billion in 2024.

The company has been cash-flow positive since 2023.

Whatnot

Whatnot takes a commission on every sale — typically 8-10% of the transaction value plus payment processing fees. Sellers pay nothing to list or to go live.

The platform only makes money when a sale happens, which aligns incentives perfectly.

The live auction format drives urgency. Sellers run live streams where they auction items in real time — holding up Pokémon card packs, opening them live, and auctioning the contents to the highest bidder.

The entertainment value keeps viewers watching for hours, and the auction format creates bidding wars that often push prices above what a static eBay listing would achieve.

Whatnot also offers "Buy It Now" listings for sellers who want standard e-commerce alongside their live sales. But live selling accounts for the vast majority of GMV (gross merchandise value).

The platform processed over $2 billion in GMV in 2023.

Patreon

Jack Conte was one half of Pomplamoose, an indie music duo that went viral on YouTube in the late 2000s. Their cover of Beyoncé's "Single Ladies" got millions of views.

Their original music was critically praised. And they were barely making enough to pay rent.

The math was brutal. A million YouTube views paid about $1,500 in ad revenue.

Conte spent weeks producing high-quality music videos that cost thousands to make. The economics didn't work.

YouTube's ad model paid creators fractions of a penny per view. Spotify paid fractions of a penny per stream.

For mid-tier creators — popular enough to have a real audience but not famous enough for brand deals — the internet was a machine that turned creative labor into pennies.

In 2013, Conte teamed up with Sam Yam, a college roommate and developer at AdRoll. Their idea was simple: let fans pay creators directly through monthly subscriptions.

Not per-video donations. Not tips.

Recurring monthly payments — like a Netflix subscription but for individual creators. They called it Patreon, from "patron of the arts." The platform launched in May 2013 and signed up its first creator the same week.

Whatnot

Grant LaFontaine and Logan Head were both collectors — Funko Pops specifically. They knew the pain of buying collectibles online.

eBay listings were sterile and full of fakes. Facebook groups were disorganized.

Verifying authenticity was a nightmare. And the selling experience was boring — take a photo, write a description, wait for someone to find it.

They noticed that live selling was already happening informally. Sellers on Instagram Live and Facebook Live would hold up items, chat with viewers, and take payments through PayPal or Venmo.

The experience was electric — the energy of a live auction combined with the intimacy of a small community. But the process was held together with duct tape — no integrated payments, no buyer protection, no shipping labels.

Whatnot launched in 2019 as a live shopping platform specifically for Funko Pop collectors. The founders built authentication into the platform from day one — Whatnot verifies high-value items before they ship.

They also integrated payments, shipping, and seller tools into a single app. What started as a niche Funko Pop marketplace rapidly expanded into Pokémon cards, sports cards, vintage toys, sneakers, comics, and eventually broader categories like fashion, electronics, and home goods.

Patreon

Patreon grew through creator evangelism. When a podcaster or YouTuber told their audience "support me on Patreon," that was free marketing to exactly the right audience.

Every creator who joins becomes a distribution channel.

The platform expanded beyond its indie roots by courting bigger creators. Podcasters were the first breakout category — shows like Chapo Trap House, True Crime Obsessed, and Last Podcast on the Left built six-figure monthly incomes on Patreon.

Then YouTubers, writers, musicians, and visual artists followed.

International expansion drove the next phase. Patreon now supports payments in multiple currencies and serves creators in over 180 countries.

The creator economy is global — a manga artist in Japan can have patrons in Brazil paying in US dollars, processed through Patreon seamlessly.

Whatnot

Whatnot grew by going deep in one niche before expanding. Funko Pops first, then Pokémon cards, then sports cards, then vintage toys.

Each community was tight-knit and passionate. Once Whatnot became the default platform for one community, they'd expand to adjacent ones.

Card collectors naturally overlap with vintage toy collectors who overlap with comic book fans.

The seller-as-entertainer model creates a unique retention loop. Top Whatnot sellers are essentially content creators who happen to sell things.

They have regular streaming schedules, loyal viewer bases, and parasocial relationships with their buyers. Viewers tune in to specific sellers like they'd watch a favorite streamer on Twitch.

This makes Whatnot stickier than traditional e-commerce.

International expansion into the UK, Europe, and Australia opened new markets with similar collector cultures. The live shopping format that's already massive in Asia (Taobao Live, TikTok Shop) is now being proven in Western markets through Whatnot.

Patreon

Platform risk is the core vulnerability. Patreon is entirely dependent on creators choosing to use it.

If YouTube, Instagram, or TikTok build sufficiently good subscription tools (YouTube Memberships already exists, Instagram Subscriptions launched), creators might consolidate onto the platforms where their audiences already live. Why send fans to Patreon when they can subscribe directly on YouTube?

The moderation challenge is constant. Patreon hosts content across the entire creative spectrum — including adult content, political commentary, and controversial creators.

Payment processors (Stripe, PayPal) have their own content policies and have pressured Patreon to remove creators. Every moderation decision risks alienating a segment of the creator community.

Revenue concentration is a risk. A relatively small number of top creators generate a disproportionate share of Patreon's revenue.

If a handful of the biggest creators leave for a competing platform or build their own subscription tools, it would materially impact Patreon's business.

Whatnot

Category expansion beyond collectibles is the growth challenge. Whatnot has pushed into fashion, electronics, home goods, and beauty, but the magic of live selling works best for unique, one-of-a-kind items where the thrill of discovery drives purchases.

Selling commodity products live is less exciting. The platform needs to prove that live commerce works for mainstream categories, not just collectibles.

Seller quality control is an ongoing challenge. With thousands of sellers going live daily, ensuring consistent product quality, accurate descriptions, and professional conduct is hard.

Bad experiences — receiving fake items, slow shipping, misleading descriptions — erode buyer trust quickly.

Competition from TikTok Shop is the emerging threat. TikTok has invested billions in building live shopping directly into its platform, with a massive built-in audience.

If TikTok Shop's live selling catches on in the US (it already dominates in Southeast Asia), it could pull both sellers and buyers away from Whatnot's niche.

Patreon

Patreon Memberships — the core product allowing creators to offer tiered monthly subscriptions with exclusive content, early access, behind-the-scenes material, and community perks. Patreon Commerce — tools for selling digital downloads, merchandise, and one-time purchases directly to fans.

Patreon Community — Discord-style community features built natively into Patreon, including chat, posts, and polls for patron-only spaces. Patreon Video — native video hosting so creators can post exclusive content directly on Patreon instead of using unlisted YouTube links.

Patreon Free Membership — a free tier that lets fans follow creators and access some content, serving as a conversion funnel to paid tiers.

Whatnot

Live Auctions — real-time video auctions where sellers showcase items, interact with buyers, and run competitive bidding. The core product that drives 80%+ of transactions.

Whatnot Marketplace — traditional e-commerce listings alongside live selling for a hybrid shopping experience. Whatnot Authentication — a verification service where high-value items (trading cards, sneakers, luxury goods) are shipped through Whatnot's authentication center before reaching buyers.

Whatnot Shipping — integrated shipping labels and tracking, with discounted USPS and UPS rates for sellers. Giveaways — sellers run free giveaways during livestreams to attract viewers and build community.

Patreon

Index Ventures led the Series A. Thrive Capital led the Series D that valued Patreon at $4 billion.

Tiger Global participated in growth rounds. Initialized Capital was an early backer.

DFJ Growth and Wellington Management invested in later rounds. Creators themselves, including YouTubers and podcasters, have been informal ambassadors and some have invested personally.

Whatnot

Andreessen Horowitz (a16z) led the Series D that valued Whatnot at $3.7 billion and participated in subsequent rounds. Y Combinator was the starting point (Whatnot was in the Winter 2020 batch).

DST Global led the Series E at a $4.8 billion valuation. CapitalG (Alphabet's growth fund), Greycroft, and Animal Capital also invested.