Microstock photography site Fotolia has taken its first outside round of investment since it was founded in 2005 and it is a doozy. The company isn’t talking about it, but an exceptionally good source with knowledge of the deal confirms that private equity firm TA Associates has invested between $50 million and $100 million in Fotolia. In comparison, rival iStockPhoto was acquired for $50 million by Getty Images three years ago. There are some rumors going around in venture circles that Fotolia got sold outright for $150 million. Our source, however, emphasizes that the company was not sold. Instead, after competitive bidding from more traditional venture firms, TA Associates came in with a massive injection of capital.
Up until now, Fotolia has been self-funded by French entrepreneurs Oleg Tscheltzoff, Thibaud Elziere, and some silent partners. The company is officially headquartered in New York City, but everyone still works from home. The company has been on a roll lately. It reached one million registered users and five million images for sale in February, introduced microstock video in April, hired an iStockPhoto co-founder in May, and just yesterday launched a royalty-free photo site called PhotoXpress.
Fotolia is smaller than iStockPhoto, but it has been going through a recent spurt of growth, while iStockPhoto seems to be stagnating. For example, unique visitors to Fotolia have tripled in the last twelve months to 3.4 million worldwide, according to comScore. Meanwhile, iStockphoto’s uniques are down 14 percent to 5.9 million (see chart below).
Fotolia is being pretty aggressive in undercutting iStockPhoto’s already low microstock prices, and the new PhotoXpress site is even more disruptive. Forget about selling images and illustrations for $1 to $10 a pop. It offers 10 free images a day. It is hard to see how this translates into huge revenues for Fotolia, but obviously it has big ambitions. Now it has the cash to really shake up the market.
Glad to see more and more companies are getting funding. I really like fotolia because how simple it is, and I’ve been using it for months for pictures.
Sheesh, here come Erick with his “sources” again.
“An exceptionally good source with knowledge of the deal confirms that private equity firm TA Associates has invested between $50 million and $100 million in Fotolia.”
If your “exceptionally good source with knowledge of the deal” has no idea if the investment was 50 million or 100 million, in my book, he is actually an “exceptionally bad source with absolutely no clue about the deal”
Is this the same “exceptionally good” source that told you that Last.fm handed user data over to the RIAA?
last fm story was right. continues to be right.
hey, it’s a real company with a real business model so they got what they deserve!
agreed. Looking forward to see what they do next. So far I dig it.
Wooow ! I am a customer, i hope they will offer images for free now for a little while
Hi my names George, I don’t understand how business works.
I’d be interested to know what kind of valuation this is at. This has got to be a billion dollar plus valuation. They sure are putting a lot into what I would consider a small market.
I’d guess in the $200mm-$300mm (post-money) range: pretty standard to sell off 20-30% to take some money off the table and invest in growth
It’s great to see some french entrepreneurs in this crazy world
french? oh crap, back to istock then… (just kidding)
not french…Oleg is Russian.
Congrats on the deal. I am sure there are great things to come from fotolia.
Awesome. I love Fotolia and use it to add photos to almost all of my blog posts on sassholes!, Social Networking Rehab and Dad-O-Matic. Good for them!
$50m – $100m is a wide range…how “exceptional” can the source be if he/she cant pin it down within $50m or so.
get a new source
wow. that is a ton of money and a huge spread. im still scratching myself but the valuation seems to make sense. wasn’t it correct that istock got valued at around a billion dollars when the investment bankers were peddling around getty to private equity firms.
@erickschonfeld @techcrunch Can you get some clarity into the accuracy of this report? Please update with more details. It would be nice to know if it’s really a capital infusion or perhaps a privatization? Thanks for continuing to cover the micro stock world.
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really?
Well done Oleg: next step, Asia!
i thought the french didnt have a word for entrepreneur? (sorry just couldnt resist.)
No we don’t, that’s why we all move to the US to become one
entrepreneur is a french word
Wow, congrats to fotolia on a ton of cash. I bet they can afford some office space now, and stop working from home!
Just another way to screw photographers. The only ones who get rich are the microstock companies.
Not sure what you mean by “get rich” but some photographers on Fotolia make 50′000$ a month…
The Photoxpress site claims to offer “free photos” for download (it looks like a membership/subscription model). Does any Fotolia contributor know how the photographers are compensated for the images appearing on Photoxpress, or is it wholly owned content?
For years Fotolia has allowed contributors to ‘donate’ rejected images to the “free section” for the purpose of generating exposure for their portfolio. For the past two months they’ve paid contributors 50 cents to move their photos which haven’t sold for two years to the free section.
Despite some reports to the contrary, Fotolia has confirmed that contributors are not paid when their photos are downloaded from PhotoXpress.
any idea how much revenue / profit they were doing?
Great news as Fotolia is reasonably priced compared to iStockPhoto even though their library may not to be that extensive yet.
iStockPhoto are a bunch of jerks who algorithmically raise the already expensive price on a image if you click on it too much.
I hope they are obliterated. Fotolia is the good reasonable guys and I hope they are successful with a bigger portfolio of images.
“…algorithmically raise the already expensive price on a image if you click on it too much.”
Dude, get your facts straight. Istock photos are priced by credits according to their size and the price of credits differs only by the size of package you buy. If you are certain this clicking theory is true, please go ahead and click on my photos a couple million times, I could use a boost.
You think Fotolia are the “good reasonable guys”? Maybe you have a hate-on for Istock, but for what it’s worth – Istock treats their photographers much better than Fotolia. In the past year Fotolia has reduced commissions, eliminated affiliate earnings and given photographs to free site PhotoXpress. They put these things through in the dark and hope noone will notice. If you want to purchase photos from an agency that treats its photographers with respect and fairness, buy from Dreamstime.
Fotolia has an office on the Avenue des Champs Elysées – that’s very expensive.
Without any benefit for an online web service.
Seems they had money from the start.
yes, Oleg started photo site as a hobby, as his core business was french ISP.