Feb 7, 2024 · 43m · my-first-million
The Dark Story Behind Pornhub’s $1.5B Business Empire
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Shaan Puri and Sam Parr examine the secretive corporate history of Pornhub and MindGeek, detailing how its founders and successive owners navigated extreme legal pressure, financial rollups, and digital disruption.
Statements from this episode (23)
Pornhub is the US's sixth-ranked site with 3 billion monthly visits
“So this is the number six most trafficked website in the United States. Three billion visits in, in like, in a month.”
Vivid Entertainment's revenue dropped 80% after free tube sites launched
“In fact, the year that he was written up in all these articles is the same year these new disruptive websites came out and revenue starts to fall and it falls 50% and it falls 80% and it just basically goes down the drain.”
YouTube founders sold to Google to avoid copyright infringement bankruptcy
“YouTube was also flooded with pirate content. Because of that, they were getting sued like crazy, and because they were worried that they would go out of business, they sold to Google for, like, a billion and a half dollars.”
Pornhub's founder originally built its video streaming technology for competitive foosball
“And he creates a live streaming video website to stream their foosball competitions, and there's not much of an audience for the foosball competitions, but he realizes as he's building all this video tech, he's like, hey, I think we could do the same thing for…”
Pornhub and Brazzers were secretly owned by the same founding team
“Or like, you know FTX had this, you know, sister company that, and by the way, nobody knew these companies were linked. So everybody thought these were two not only unlinked companies, they thought they were enemies. Cause at the time, all of the studios were …”
Pornhub bootstrapped to hundreds of employees without taking outside investment
“Bootstrapped. No, no investors, no nothing.”
The US government seized $9 million from Pornhub's early corporate accounts
“The government seizes nine million dollars out of one of their bank accounts, just takes it.”
Pornhub's founders sold the network to Fabian Thylmann for $140 million
“So they sell it to that guy you were referring to, this guy, Fabian Tillman. A hundred, so a hundred forty million is what they sold it to him for.”
Fabian Thylmann raised $362 million in secret debt for his rollup
“And what later comes out is that he got a three hundred and sixty two million dollar loan from unknown secret investors.”
Wall Street bankers spun out exclusively to finance Fabian Thylmann's adult rollup
“It was a bunch of X. I don't know if it was JP Morgan or Morgan Stanley, whatever, some big bank, two bankers from there spun out, created their own like lending firm specifically to lend just to this one play.”
Pornhub's secret acquisition debt carried a 20% interest rate
“And they lended it at a 20% interest rate.”
Bill Ackman texted Visa's CEO to cut off Pornhub's payment processing
“And so what Bill Ackman does is he goes and he immediately texts the CEO of Visa, and he sends him the article. He's like, your company is enabling this. These guys are making money off of this. You better do something about this. And the CEO of Visa is like, …”
Fabian Thylmann was forced to sell MindGeek in a $77M fire sale
“He's forced to sell on a fire sale. He sells it for seventy seven million dollars.”
Software rollup Valsoft reached a $1B valuation with $100M in annual EBITDA
“They're now, it's a billion dollar company. Now they have over a hundred million in EBITDA every year. Just from the, they've acquired, like, whatever, 50 companies or so. They have, like, five hundred million in revenues, and then they have, like, 20 to 30% n…”
Bernd Bergmair was the secret financial backer behind MindGeek's $77M buyout
“They said that actually the employees bought it out for seventy seven million, like the two executives bought it out. But that didn't smell quite right. Where did these, where do these employees get seventy seven million dollars to buy this, right? Like how mu…”
Bernd Bergmair extracted $2 million per month from MindGeek via debt payments
“One of the reasons why is this guy basically lends money to the company and takes out two million a month in just debt payments himself. Plus they shift revenue around all these subsidiaries. So there's all these shell companies. So you don't actually, they've…”
Ethical Capital Partners was formed specifically and solely to acquire Pornhub
“And I think it's about to exchange hands again, because now a private equity group bought it. And do you want to know the name of the private equity group that bought Pornhub? ... Ethical capital partners. Do you want to know how many companies they own? One. …”
Max Levchin's anti-fraud engineering saved PayPal while competing payment services failed
“Max's technical brilliance in fighting the fraudsters. Kept PayPal alive when any other money transmitting service Just died because the fraudsters just had too much to gain, and they were too sophisticated, and as a young company, it's really hard to defend a…”
Founders must choose projects carefully because anything can be optimized to infinity
“What I, he goes, I realized you gotta be really careful what you, what projects you pick because anything can be optimized to infinity.”
A company's core mission can simply be providing good jobs for people
“Your product doesn't have to change the world. Your product, actually, as a CEO or owner, could be, I create jobs for wonderful people, and I give them a great place to work. And, like, most people just want a nine-to-five, and they want to play softball on th…”
DuckDuckGo is a more popular US website than Yahoo, Wikipedia, and Twitter
“It's more popular than Yahoo and Wikipedia and Twitter.”
DuckDuckGo's $100M+ funding round was entirely early employees selling secondary stock
“And actually recently, they raised a hundred million dollars in funding, or maybe two hundred million, but it was over a hundred million. And I heard that none of the money actually went to the company. It was simply early employees selling some of their stake…”