Throne, which allows fans to gift items to creators from their wishlist, is launching a new gifting portal for family and friends called Happy Wishlist. But what's more interesting about this story is that the company returned the money it raised from investors last year, choosing to go the in-house route.
starting throne
The startup was founded in 2021 by Patrice Becker and Leonhard Soenke. The duo previously launched calendar management app Meeter, which was acquired by workflow automation startup Bardeen.
In February, the company raised $830,000 in SAFE notes with a valuation cap of $30 million from investors including Ryan Hoover's Weekend Fund, Cory Levy of Z Fellows, and Bibuf Norby (B8ta). did.
A SAFE note is a way to raise money now and define a valuation for a company at a later stage, usually during the next investment round. This is a popular founder-friendly funding method for early-stage startups who want to raise pre-seed or seed funding without immediate dilution.
Image credit: Throne
The co-founders began exploring the idea for Throne when their creative friends were talking about issues like creating post office boxes, maintaining privacy, catalog limitations and shipping issues.
“There has never been a solution on the market for content creators to securely receive physical gifts. The core issue is creator privacy. Creator addresses cannot be made public to fans, so we are unable to provide any security between creators and fans. It acts as a firewall,” Becker told TechCrunch.
Throne allows creators to create wishlists from various sources on the web. Fans can gift items from that list to creators. Throne guarantees that personal information such as address and payment details will not be divulged to any party. The company also allows creators to turn wishlist items into crowdfunded gifts.
Although Throne claims to be a secure solution, a security bug has put the startup's name in the news. Last year, Zerforschung, a German security researcher collective, discovered a bug in the platform that exposed creators' private addresses. Throne did not provide details, but said the bug has been fixed. It also claimed that an anonymous German data privacy expert had “confirmed that there is no data risk”.
The startup makes money by charging commissions to partner brands whose items are gifted to creators upon sale. For non-partner brands, Throne charges a service fee in addition to the gift price to fulfill your order. Last month, the startup surpassed 400,000 creators on its platform.
Image credit: Throne
Twitch is the most important platform for the company. Over half of creators signed up for Throne through Twitch login. Creators can show their appreciation by setting up stream girlfriend alerts for new gifts and posts.
return of money to investors
Throne CEO Patrice Becker added that in 2021, prior to raising the seed round, Throne's monthly gift purchases exceeded $1 million, with 50% month-over-month growth. This led the company to raise a non-dilutive round.
Finally, in the summer of 2023, the company realized that the market it was addressing might not be conducive to venture-backed results. The company was looking to raise Series A funding, but decided to focus on profitability and returned the funds to investors by December 2023.
“I know of many companies with limited market size, healthy revenues, and profitable operations, but they are “stuck” in the VC cycle. For them, liquidation preferences and investor pressure to leverage the funds raised (often creating a high-cost infrastructure) leave them with no choice but to hope for a unicorn outcome.” said Becker.
“We continued to develop our team to be as lean and efficient as possible, allowing us to move very quickly with very little administrative overhead. We were making a profit in the mid-seven digits, creating enough of a safety cushion that we felt comfortable paying back our investment before paying it back.”
Image credit: Throne
The company also has products such as Throne Storefront, a linked-in bio product for brands such as Linus Media Group. There's also Throne Exchange, a virtual Secret Santa system that allows users to send gifts to each other without revealing their addresses. Becker said 1,500 people around the world took part in Christmas gift exchanges last year. Both of these areas contribute a small amount to the company's revenue.
Open happy wishlist
The founders saw fans gifting items to creators and realized there was room for wishlist-based gifting in a personal setting as well. The company's newest service, Happy Wishlist, focuses on the wishlists of friends and family. Friends can order items from their wishlist to their address and physically hand-deliver them to the recipient at an event or party.
Image credit: Throne
Since the friends are ordering products to their addresses, the startup doesn't need to be involved in order fulfillment.
The company is considering making money by partnering with affiliate links and brands to earn commissions from purchases. Becker said the startup aims to turn Happy Wishlist into a product that generates “millions” in revenue within the next year through its monetization strategy. Essentially, Throne has already diversified its revenue streams and wants to make a profit rather than raise money.