- Despite its success, OnlyFans is struggling to find investors, according to an Axios report.
- Investors appear to have been deterred by the platform's porn-heavy content.
- The site has tried to change its image, but seems unable to escape the content that made it popular.
- See more stories on Insider's business page.
OnlyFans has no trouble drumming up user interest, but investors may be more hesitant to buy into the NSFW brand.
The online creator platform that allows users to sell or purchase original content – usually of the pornographic variety – is struggling to find investors, according to a report from Axios. The company is actively seeking a "strategic partner," a source close to the company told the publication.
OnlyFans has been actively looking for investors since the spring, but several investors have passed on the opportunity to support the company, Axios said.
The startup is valued at over $1 billion and the company is extremely profitable – taking a 20% cut of the more than $2 billion its creators generated in 2020. Based on its profit margin, if the company sold almost anything other than porn, it would be luring in investors in droves.
Startups that cater to people's vices have often been overlooked and underfunded when it comes to major venture capital firms. This is in part due to vice clauses that bar institutional funds from investing in companies within the more forbidden arenas of cannabis, gambling, and sex.
But these companies are also notoriously profitable. The porn industry itself was valued at $97 billion as of 2020, but the industry also comes with several risks. For example, MindGeek - a company that runs several porn sites, including PornHub, and amasses over 115 million visitors per day - has created issues for investors when it comes to its depiction of underage people in videos, as well as allegations its videos feature sex trafficking victims. For some companies, a porn startup could create a massive public relations nightmare.
When it comes to OnlyFans, some investors have expressed concern over minors creating accounts on the platform, Axios said, though the company says it has controls in place to prevent the issue. Others worry the company's reputation could inhibit brand partnerships, the publication reported.
In June, Bloomberg reported that OnlyFans was looking to shift away from its adult content and raise new funding with investors that would help the site become more of a mainstream platform, catering to more celebrities and social media influencers.
So far, the startup appears to have been unable to distance itself from the porn content that made it successful in the first place.
Axios reported that the money OnlyFans is hoping to raise would allow its majority owner porn mogul Leo Radivinsky to partially sell off his stake. The investors could also help give the company "more legitimacy," a VC told Axios.