Three billion photos are uploaded from people’s phones and cameras every day. But Jonathan Sposato, the CEO of fast growing mobile and web photo editing tool PicMonkey, still believes we are in the early days in the world of digital photography.
Sposato would know. He’s been in the online photos industry for more than a decade, first selling his web-based photo editing tool Picnik to Google in 2010. But Google (GOOG) later shut Picnik down, displacing the tool’s millions of users. Sposato saw the opportunity to create a new photo editing tool in 2012, but in a world where Instagram (FB) had already made its mark and where iPhones (AAPL) were replacing cameras as a way to take photos.
His brainchild was PicMonkey. While Sposato admits that the photo editing space was and is more competitive this time around, PicMonkey has quietly been able to amass millions of users a month, five billion photos edited, and several hundred thousand paying users. The company is making millions in revenue and is profitable, a rarity in the currently landscape of cash-burning startups and Unicorns, an industry term referring to startups valued at $1 billion or more.
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PicMonkey’s product is relatively simple. The startup offers a free web-based photo editor that allows users to do more than just add filters to photos. Users can also retouch photos and add visual effects, text, textures, and more. There is a social component in which users can share photos directly to Facebook, Instagram, and Twitter (TWTR). “It’s not as narrow as some of the mobile photo editing options in terms of features,” Sposato explained.
The average session time using PicMonkey is around 20 minutes, which the startup claims is high. PicMonkey has purposely tried to keep the photo editing tool simple and easy to use, contrary to more heavy-duty editing software programs like Adobe Photoshop (ADBE), added Brent Chudoba, the company’s chief operating officer, who was formerly an executive at online survey giant SurveyMonkey.
What’s more impressive is that the startup has been able to remain profitable and is making real revenue. Users can access the basic editing tools for free, but hundreds of thousands of users pay $4.99 per month for advanced filters, fonts, editing tools, and more.
PicMonkey didn’t release exact revenue numbers, but through Coins2Day’s back of the napkin math, PicMonkey is generating around $16 or $17 million per year in revenue with the amount of paying users. Chudoba said the subscription business is growing 40% year over year. Most of the paid customers, he adds, are from small businesses.
Of course, it’s worth noting that there are other social apps that provide basic editing tools and have more users. Instagram, for example, now has 500 million users and 80 million photos are shared per day.
But much of PicMonkey’s growth, the company hopes, will likely come from the startup’s iOS and Android apps, which were just released this week. Previously, PicMonkey was only a web-based tool, and now will have a mobile offering as well.
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There’s also international expansion with plans to create more localized versions of the editing service. Currently, the majority of PicMonkey’s traffic is coming from outside of the U.S., and the company just opened an office in Dublin, Ireland.
PicMonkey also has some recent new capital to put towards future growth. Although profitable, the startup raised $41 million in funding last year from Spectrum Equity, the private equity firm that has backed online education company Lynda (which was sold to LinkedIn (LNKD) in 2015), SurveyMonkey and Ancestry.com.