OnlyFans is a social networking platform for content creators. Creators provide their "fans" with video, picture, and audio material in return for a monthly membership fee.
OnlyFans, on the other hand, does not have a perfect track record. Its original mission (to provide a website for content creators to monetize their content without the use or requirement of advertisers) appears to have been muddied by recent controversies, not to mention the fact that religious and other conservative groups do not see the platform as beneficial to society.
Perhaps the increase in fans connecting with content creators in 2020 was accelerated by widespread confinement to the house in 2020. Beyonce gave the platform a credit in her remixed version of "Savage," extending its reach even further.
Since Beyonce referenced it in the song "Savage" in April 2020, the platform has grown exponentially. The platform has approximately 70 million registered users and over 1 million creators globally as of June 2021.
Onlyfans is built on a monthly membership model in which each "fan" gets the option to watch their chosen content producer, with Onlyfans taking a 20% cut. Furthermore, any extra money earned by the content producer, such as gratuities or pay per view, is less than the 20% fee imposed by the corporation. As a result, it is a very solid and easy business plan.
Onlyfans was founded in the beginning to allow celebrities to communicate with their fans on a more intimate level. Nonetheless, it drew those associated with the adult sector when they grasped the possibility being given over time. As a result, Onlyfans became dominated by pornographic material, which is why the internet community knows it informally as a pornography website.
The business model removes the need for advertising and middlemen (for example, film producers and conventional adult websites), providing creators more control over their content and company.
Its appeal has spread beyond the adult sector, with athletes, singers, celebrities, comedians, health and spiritual experts, fitness gurus, chefs, and cosmetics artists all using it.
On August 19th, 2021, the firm declared that beginning in October, it will not accept "any material featuring sexually explicit activity." Photos and films of naked people will be permitted.
On August 25th, it overturned its decision:
OnlyFans is owned by Fenix International Limited, a private business located in London that was created in 2016 by adult industry veteran Tim Stockley.
Stockley stepped down as CEO in early 2022. The firm has over 100 million users and has distributed over $3 billion in creative profits. According to Bloomberg, the company's revenues in 2020 will be $2 billion, with a profit of $300 million, according to The Information.
Who owns OnlyFans?
OnlyFans was formed in 2016 by Tim and Thomas Stokely, with assistance from their father, Guy Stokely. Tim is the current CEO, with Thomas as COO and Guy as CFO.
In 2018, Leo Radvinski, noted for his "labor" with other sites such as MyFreeCams, purchased a 75% stake in OnlyFans' parent company, Fenix International, Ltd., and became a director. Prior to Radvinski's involvement, OnlyFans was regarded as a "work-safe" platform. It wasn't until he became a three-quarter owner that the platform's emphasis began to turn toward NSFW material.
Fenix International, Ltd. was incorporated on September 1, 2016, with a filing date of September 1, 2016. Fenix International, Ltd has relocated three times since its inception.
Is OnlyFans stock available for purchase?
No. Fenix International Limited is the only owner of OnlyFans.
The creator, Tim Stokely, and adult industry veteran Leo Radvinsky, an adult webcam business entrepreneur who bought a controlling position in OnlyFans in 2018, are the key stockholders.
Due to the mature nature of its creators, the business has yet to receive financing from venture capital companies.
Investors may grow increasingly interested in the firm if it develops into other genres.
When will the Onlyfans go public?
The IPO date for OnlyFans is presently unclear.
The management team has shown no interest in making Onlyfans a publicly listed stock, but we can bet it will attract a lot of attention and a premium value if it does. The company's ownership is concentrated at the top, and it has not sought venture investment. Fast-growing businesses often seek outside money from venture capital firms to assist drive expansion.
However, we know from reporting that the corporation makes roughly 12% of its turnover in profit. Profits may therefore be re-invested to drive expansion.
If the firm needs more funds to grow, it may always seek private finance. Private investors will ultimately need liquidity, which may necessitate an IPO. OnlyFans might potentially employ private finance to determine its worth before going public. In addition, the owners may attempt to obtain funds via an IPO rather than through private fundraising.
Allowing the market to decide the company's worth may be the most profitable approach for the existing owners.
We won't know until the owners make further remarks or give media interviews. Because it is situated in London, it is more likely to list on the London Stock Exchange.
Before we get into the numbers, let's go over the fact that OnlyFans is looking for cash. How much, where did it come from, and why?
The Raine Group agreed to assist the startup start seeking investors, but many large corporations passed – and quickly. According to research, the corporation desires "legitimacy" and wishes to at least partly compensate Radvinsky in order to improve the Stokely family's status.
Many other firms with comparable growth to OnlyFans would have obtained the funds requested far more quickly.
This investment round's pitch deck looks like this, with real 2020 numbers, actual 2021 figures through Q1, and anticipated 2022 figures.
GMV:
2020 – $2.2 billion
2021 – $5.9 billion
2022 – $12.5 billion
Net revenues:
2020 – $375 million
2021 – $1.2 billion
2022 – $2.5 billion
FCF:
2020 – $150 million
2021 – $620 million
2022 – $1.2 billion
Since the company's inception in 2016, OnlyFans has compensated its creators $3.2 billion.
Other facts and numbers are as follows:
Over 300 creators make $1 million or more every year.
Around 16,000 creators make $50,000 each year.
More than 7 million people have paid monthly memberships, while an even larger number of users access free material.
OnlyFans was a respectable firm before Radvinski's involvement, but after he purchased 75% of Fenix International Ltd, the company has "suffered" by the clear NSFW designation — even if this component of the business is strangely kept out of pitch-deck material. Many investors objected to this since it was seen as deceptive misleading advertising by many prospective investors.
Will OnlyFans have the potential to become a public company?
It's tough to predict how well OnlyFans would do if it went public. In terms of how successful this sort of organization can be in the long run, everything about it is relatively unknown.
Ad income is the lifeblood of content creator channels on platforms like YouTube and Instagram. The creators of OnlyFans rely on memberships and individual requests to generate cash.
The ad income and site traffic models are much more dependable and tested. Top YouTube creators may earn six or even seven figures per year.
OnlyFans' finances are quite transparent. Every money that comes via the site is subject to a 20% cut.
That is, if a content producer earns $100,000 in membership fees in a year, OnlyFans receives $20,000 of that only for providing the channel through which the material is sold.
It doesn't take a genius to see that a subscription business is fantastic, and the proportion that OnlyFans takes is significant. However, the service actually relies on content creators to continue funneling income into OnlyFans' pocketbook.
Are there any concerns about Onlyfans?
We are rather certain that there are no worries with its business model. For starters, as previously said, they have no direct competitors, and corporations with funds on hand to make fresh investments are not able to build a rival to Onlyfans. We're sure Facebook, Microsoft, Apple, and any other industry giant would prefer not to be associated with a pornographic website.
Second, it has attained the network effect's holy grail. The more individuals there are, the more engagement there will be. The number of new accounts is increasing at an unfathomable rate. The data is hazy on this front, however as of December 2020, Onlyfans had 500,000 new members every day. According to the site's chief operating officer, Thomas Stokely, it has attracted an average of 8,000 new content creators every day. The potential for expansion is huge!
Finally, Onlyfans seems to be financially stable. On this side, the information is hazy (disadvantage of being a privately held company). According to Financial Times research, the company would make over $74 million in pre-tax profit between November 2019 and 2020.
Will Onlyfans stock be the first on the market?
The risk of being the first to move in a place is that someone else will come along and do it better. Especially if they have a more recognizable brand or greater funds.
OnlyFans' single greatest benefit is that firms like Facebook, Amazon, and Google are unlikely to want to be associated with a pornographic website.
However, there are other firms that may be able to supply these content creators with greater options. And this while just taking a 10 or 15% cut of subscriptions. At that moment, the OnlyFans revenue model crumbles totally.
OnlyFans, on the other hand, is quickly becoming a household name. Even if it is sometimes the punchline of a joke. It is widely acknowledged as the genuine pioneer in tailored adult content subscriptions.
Subscription revenues are effective. However, this is scarcely comparable to a SaaS startup with a subscription model, such as Snowflake (NYSE:SNOW) or Fastly (NYSE:FSLY).
OnlyFans will need its content creators to constantly produce fresh material. And, sure, the number of creators who have signed up for the site has grown dramatically during the COVID-19 quarantine. But what happens after the epidemic has passed?
Three ways to potential own the stock in the future
With that, below are three possible methods to hold OnlyFans stock:
1. Purchase OnlyFans stock after the IPO of OnlyFans.
Because obtaining IPO shares is nearly always difficult for private investors, the simplest option to purchase OnlyFans stock is to simply wait for the IPO to conclude.
In reality, unless your brokerage account is worth more than $1 million and your broker gets IPO allocations on a regular basis, you are unlikely to get in on high-demand IPOs.
In certain situations, patient investors may be able to purchase the stock at or below the IPO price. This is not always the case.
For example, the Beyond Meat IPO skyrocketed and never looked back. However, Uber, which many thought would skyrocket, instead plummeted on the day of its IPO.
Putting forth a lot of work to get IPO shares may not be worth it in the end. You may also invest time and money obtaining shares just to get a modest allocation, restricting your potential gain.
Though IPOs may give one-day gains of more than 20%, and in rare situations (such as Airbnb and Doordash), the most substantial profits will occur during the decade after the IPO if the firm is really innovative.
Consider the companies Netflix, Amazon, and Tesla. You might have purchased the stock years after the IPO and still profited by more than 1,000%.
If you want to acquire OnlyFans stock in the long run, consider starting a stake after the IPO and averaging down if the stock declines.
Near-term traders may seek to purchase IPO shares in the hopes of profiting in the short term.
2. Purchase OnlyFans stock via a broker in the OnlyFans IPO.
Ambitious investors might position themselves to participate in the OnlyFans IPO when it becomes available.
Your prospects of obtaining IPO shares are determined by four factors:
IPO demand
Your broker and eligibility
Your assets under management (AUM) at the broker
Propensity to flip shares
As IPO demand grows, so do the odds of getting IPO shares. As a result, the IPOs that are most appealing to the general public are the most difficult to get.
3. Try to buy shares in pre-IPO secondary markets.
Founders, early workers, and investors are often placed in tough situations. They possess valuable shares in a corporation that does not trade on the open market.
Because of their stock holdings, these stockholders may have a multi-million dollar net worth, but the stock is not liquid because it is not traded on an exchange.
This might be a problem if OnlyFans provides its workers stock in the holding company. Private purchasers may always be sought by the major owners.
A few platforms have emerged to allow small owners (workers and early investors) to sell their interests prior to the IPO.
Linqto, EquityZen, and Forge are some of the most well-known sites.
These websites increase the liquidity of an otherwise illiquid asset. Accredited investors (those with more than $1,000,000 in invested assets) may join these sites and seek to purchase these firms' shares when they become available.
Because the company's financials have not yet been publicly reported with regulators, the shares are only available to accredited investors, increasing the investors' risk.
Demand for high-profile corporations is strong, reducing your chances of getting shares. The author believes that this is a low-probability method of acquiring shares. However, several readers have shared success stories about purchasing shares in this manner.
Should I wait for the IPO?
It is apparent that the firm is performing well at this point. You'd want to invest in it, but since there's no word on when (or if) it'll be listed on the stock exchange, you'd be better off looking for anything else to put your money into.
Waiting puts you at danger of losing money when there are so many chances in the market right now. We all know it's not the same.
Summary
There is nothing more appealing to investors than gambling on a successful private firm that may be taken public. OnlyFans was one of the few people who escaped the COVID-19 quarantine.
It should remain so for as long as the infection persists. As of September, the site has over 30 million registered users and over 450,000 active content creators. A figure that is only expected to rise exponentially over time.
However, no study is complete until some of the hazards are assessed. OnlyFans had previously experienced a data breach, which resulted in enormous quantities of private material being published to the internet.
OnlyFans should prioritize improving its cyber security detail if it wants to keep the confidence of its content creators.
It is still a relatively small market. OnlyFans will eventually need to extend its products in order to increase its entire addressable market. Only a small percentage of individuals are still prepared to pay for pornography, particularly on the internet. As a result, OnlyFans may have to be inventive in order to increase its demand.
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