Throne, which allows fans to gift items to the creators on their wish list, is launching a new gifting portal for family and friends called Happy Wishlist. However, the most interesting part of the story is that last year, the company returned the money it had raised from investors and opted for the bootstrap route.
initial throne
The startup was founded in 2021 by Patrice Becker and Leonhard Soenke. Previously, the duo started calendar management app Meeter, which was acquired by workflow automation startup Bardeen.
In February, the company raised $830,000 in a SAFE note from investors including Ryan Hoover’s Weekend Fund, Z Fellows’ Cory Levy, and Vibhu Norby (B8ta) at a $30 million valuation cap.
A SAFE note is a way to raise money right now and define the valuation of the company at a later stage, usually during the next investment round. It is a popular founder-friendly fundraising method for early-stage startups that want to raise some seed or seed capital without immediately diluting it.
Image credits: Throne
The co-founders began exploring the idea of Throne when some of their creator friends talked about topics like creating a PO Box, maintaining privacy, and other topics like a limited catalog and delivery issues.
“There was no solution on the market for content creators to safely receive physical gifts. The central issue is creator privacy: the creator’s address cannot be revealed to the fan and therefore we act as a firewall between creators and their fans,” Becker told TechCrunch.
Throne allows creators to create a wishlist through various sources on the web. Fans can gift creators items from that list. Throne ensures that no personal information, such as addresses or payment details, is exposed to any party. The company also allows creators to turn a wish list item into a crowdfunded gift.
While Throne claims to be a secure solution, the startup’s name appeared in the news due to a security bug. Last year, Zerforschung, a German collective of security researchers, found a bug on the platform that exposed creators’ private addresses. Throne did not reveal details but said it fixed the bug. It also stated that an anonymous German data privacy expert “confirmed that there was no risk to the data.”
The startup makes money by charging a commission to partner brands whose items are given away to creators based on sales. For non-partner brands, Throne charges a service fee in addition to the gift price to fulfill the order. The startup surpassed the 400,000 creator mark on the platform last month.
Image credits: Throne
Twitch is the company’s most important platform. More than half of creators signed up for Throne through Twitch login. Creators can set up broadcast alerts for new gifts or contributions so they can give a shoutout.
Return of investors’ money
Throne CEO Patrice Becker added that Throne had surpassed $1 million in gift purchases for a month with a 50% month-over-month growth rate in 2021 before launching the seed round. This led the company to propose a non-dilutive round.
Finally, in the summer of 2023, the company realized that the market it is addressing might not lead to a venture capital-backed outcome. Although the company was about to raise its Series A, it decided to turn towards profitability and returned the money to the investor in December 2023.
“We know many companies with limited market size but healthy revenues that could operate profitably, but are ‘stuck’ in the venture capital cycle. For them, liquidation preferences and pressure from investors to deploy the capital they raised (often creating a high cost basis) put them in a position where they have no choice but to wait for a unicorn outcome,” Becker said. .
“We continued to develop our team in the most agile and efficient way possible, which allowed us to move forward very quickly and with very little administrative expenses. We had a revenue ratio of around seven figures and were profitable when we decided to fully refund our investors. We generate enough of a security cushion to feel comfortable repaying the investment before doing so.”
Image credits: Throne
The company has other products like Throne Storefront, which is a link-in-bio product for brands like Linus Media Group. There’s also Throne Exchange, which is a virtual Secret Santa system that allows users to send gifts to each other without revealing addresses. Becker said that last year 1,500 people around the world participated in the Christmas gift exchange. Both verticals contribute a small amount to the company’s revenue.
Open happy wish list
After watching fans gift items to creators, the founders realized there’s room for wishlist-based gifting in a personal setting, too. The company’s newest service, Happy Wishlist, focuses on wish lists for friends and family. Friends can order wish list items to their own address and physically deliver them to the recipient at an event or party.
Image credits: Throne
Because friends order items to their own addresses, the startup does not need to participate in fulfilling the order.
The company seeks to make money through affiliate links, as well as partnerships with brands to receive commissions on purchases. Becker said the startup aims to make Happy Wishlist a “multi-million dollar” revenue product over the next year with its monetization strategy. Basically, Throne is already diversifying its revenue sources: instead of raising money, it wants to make money.
