Fabian Thylmann landed a big coup with porn sites, but Pornhub and Co. are always criticized. A new investor wants to change that.
You can probably call Pornhub a real internet phenomenon. Not only is the site one of the most popular porn offerings on the web – it is one of the most visited websites at all and, according to Similarweb, is still ahead of the online retailer Amazon. The fact that Pornhub became so big is mainly due to a German: Fabian Thylmann. With sites like “Youporn”, “Pornhub” and “My Dirty Hobby”, Thylmann built up a far-reaching porn empire.
The sex film business made him millions: in 2013, the founder sold his shares in the Mindgeek company behind it. The group of companies is said to have implemented a mid-three-digit million amount at the time of the exit and Thylmann received 100 million US dollars for his shares.
Not just a success story
Meanwhile, Thylmann’s story is not just a success story. In 2012 he was arrested for tax evasion but was released on bail. At the end of 2016, the district court of Aachen sentenced him to one year and four months in prison on probation for evading income taxes. In the spring of 2018, the public prosecutor’s office finally investigated an allegation of money laundering. However, she dropped the case against a payment of 950,000 euros.
Since it was founded in 2007, Pornhub has also been regularly criticized, for example the site has been accused of distributing videos showing rape and abuse of minors. After an investigative report in the New York Times in 2020, the credit card companies Mastercard and Visa have since withdrawn their payment services from the site.
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Pornhub deleted millions of videos and has since only allowed content to be uploaded by verified users. Still, in the past year, there was another critical report of poor content moderation on Pornhub. A documentary has just been released on the Netflix streaming service that deals with the history of the porn platform.
New owner puts focus on ethically difficult industries
That should now change into something more positive. Mindgeek, the parent company of the various porn platforms, has a new owner. He comes from Canada, is called “Ethical Capital Partners” (ECP) and describes his approach as “ethics-first”: ECP is looking for investment objects “in industries that require management with high ethical principles”. Mindgeek is ECP’s first investment, a purchase price was not mentioned.
Fabian Thylmann, however, is now investing himself – no longer specifically in porn platforms, but in startups from different industries. He told us how his story as an entrepreneur began, what those around him said about building a porn empire and how working with other investors was like given his porn past already in 2019 at the Heureka conference of the start-up scene reveal. Here we publish the interview for you again due to current events:
Fabian, you are considered one of the most important tech founders in Germany. Why haven’t you appeared in public for so long?
That just happened. Everyone thought I was hiding and that got through to the press. But I never hid, just no one tried to talk to me.
Many have asked you about interviews or if you want to speak at conferences. But you never came
Shortly after I sold the company, I might have been a little hesitant to talk to the press because I had a bad experience. Now I’m more open. If someone asks me something, I usually answer.
What got you into the porn business?
I was a programmer back then and had a few clients in the porn industry. I was very young and lived in Belgium. In the beginning I didn’t have any big customers, but I wanted to do more complicated projects. So I started working with adult content because that generated a lot of traffic at the time. That’s how it started.
How did your parents react to you working in the porn industry?
It got easier as the company grew. That’s when they finally stopped asking me to study something real. I think that was when the company had 500 employees.
You were first convicted of tax evasion in 2012. Is that why you left your company?
It wasn’t the only reason, but it played a part in the decision. The biggest problem was that the more assets I bought, the more difficult it became to sell the whole thing. We wanted to be taken over by someone who is publicly traded and comes from the entertainment sector. By that I don’t mean adult content, but films, for example. But that didn’t work. Then I was offered a deal with an existing investor and I went for it. It made more sense at the time than continuing the company. The biggest problem I had was banking: I had trouble opening a bank account. Even the cool hip startup banks kicked me out.
Which?
I don’t name names.
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As an investor, you said to one of the founders of your portfolio startups, “I open many doors for you, but close just as many.” What do you mean by that?
I was always afraid that the founders would lose their bank account if I got too many shares in their startup. I told the founders quite frankly that there was a risk. It didn’t happen too often though. The banks usually agreed, provided I didn’t get too many shares.
What is the explanation of the banks when they close an account?
A bank in Belgium once said: “What would our other customers say if they saw you?”
What do VCs in Germany think about you? Do they invest with you?
For example, I invested in Giant Swarm, which many other big investors have. They didn’t have a problem with me. I usually make very early angel investments, sometimes follow-up investments. If there is trouble, I go. I don’t want to stand in the way of startups.
You invested in the cannabis startup Cannamedical. The industry doesn’t have the best reputation. Did you specifically choose them because other investors avoid them?
It’s not the industry that has a bad reputation, it’s the product. But I fear nothing. It doesn’t bother me if people look askance at startups like this. My reputation is ruined anyway, nothing will change that. Some people have said, “First you did porn, now you did drugs. Are you crazy?” But for me it is a very promising business model and a very interesting industry. It’s just emerging out of nowhere and I can be there from the start. There is rarely such a chance.
In which startups do you generally invest?
I have no focus. I look more at the person and their ideas than at the product. I want people who have a certain drive and vibe. That’s difficult to express. I look at everything, really everything. crazy i know