Patreon's valuation dropped 70% in the past year and its pricey deals with top TikTokers fell spectacularly flat, internal documents show

• Patreon SVP Carlos Cabrera told staff in a September memo that the company's valuation had fallen 70%.
• Patreon was last publicly valued at $4 billion in April 2021.

Internal documents obtained by Insider portended the headwinds facing Patreon just 10 days before it issued layoffs of 17% of its workforce, or roughly 80 of its 470 employees.

Patreon's SVP of finance Carlos Cabrera wrote in a staff memo on September 3 that the company's valuation had dipped significantly – to the tune of 70% over the past year.

"Most of the companies that had benefited from COVID lockdowns have experienced the opposite effect with COVID recovery," he wrote.

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The valuation that Cabrera was referencing was Patreon's 409A. These valuations are calculated by outside auditors to determine the value of a private company's common stock. (It differs slightly from the post-money valuations companies get when fundraising, which are typically based on the price of preferred stock).

Patreon was last publicly valued at $4 billion in April 2021 amid a $155 million Series F led by Tiger Global Management. A 70% drop would mean that it is valued at less than $1.5 billion today.

Insider also reported in September on how Patreon's million-dollar deals to onboard top TikTokers Larray and Lil Huddy fell spectacularly flat – with both raking in around $2,500 during their first months on the platform, far less than the company expected.

Read the full details of Patreon's valuation drop and how it's impacted the company's IPO plans.

And check out Insider's investigation into Patreon deals with TikTokers like Larray and Lil Huddy that underperformed.