Patreon bought the maker of an event-ticketing app in October, but the companies didn't disclose the terms of the deal at that time. Now we know how much of a haircut investors in the smaller startup, Moment, likely took.
Based in Los Angeles, Moment House Inc. is a ticketed-events app for anything from concerts to yoga classes to podcasts and comedy shows. The website touts events from celebrities and other personalities including Justin Bieber, Halsey, Bill Burr, Steve-O and the hosts of Pod Save America.
Founded in 2019, Moment raised $13.5 million total, including $12 million in a Series A round that valued the company at $47 million in August 2021. Its investors included the singer Halsey, comedian Whitney Cummings, actor Jared Leto, Patreon CEO Jack Conte and music industry titan Scooter Braun.
Patreon Inc. filed a document with the SEC Tuesday confirming that it bought Moment in a deal that involved offering $10.6 million in shares to some of Moment's investors.
As an all-stock deal, that suggested Moment took more than a 77% haircut off of its last known valuation.
Not everyone fares equally well in deals like this. Typically, investors in private companies receive preferred shares which are first in line for a payout when the startup sells. Their gains can come at the expense of founders and employees, who usually receive common stock. If all the money goes to investors in a sale, employees may see little or nothing in exchange for stock options they received as compensation.
It's unclear if there was also a cash portion in the deal. Sometimes founders and employees retained by the acquiring company receive new stock packages, which some insiders consider part of an acquisition's total value.
Noa Branitzky, a spokesperson for Patreon, declined to comment on the financial aspects of the transaction, but said in a statement that the company was "excited about the capabilities Moment will bring to our Patreon community" and noted that some Moment had paid tens of millions dollars to its business customers and some had received "six figures" from events hosted on the service.
"In the coming months, we plan to integrate foundational elements of the Moment and Patreon (services) to enable creators and fans to have a seamless experience across our membership, digital commerce, and digital event products," Patreon wrote in a blog post announcing the acquisition on Oct. 17.
Moment's employees will also be joining Patreon, TechCrunch reported last month. The company had 18 employees at of Oct. 17, according to PitchBook.
Patreon CEO Jack Conte also told Axios in October that although the companies weren't disclosing the financial terms, the deal was small enough that it didn't have to go through any regulatory scrutiny.
Based in San Francisco, Patreon helps independent artists and creators monetize their followings through membership-based subscriptions.
Last year, Patreon announced layoffs that would impact 17% of its workforce at the time, affecting around 80 people.
Patreon has raised more than $425 million over the past decade and was valued at more than $4 billion in 2021 after it raised $155 million in a Series F round led by Tiger Global Management, according to PitchBook.
