After raising a total of $11.2 million since its founding in 2005, Tiny Pictures sold to Shutterfly on Friday for $1.3 million in cash and another $1.3 million in restricted stock to employees, which has some performance triggers. If you back out the earnout, investors only got back about a tenth of what they put in.
Those investors include Mohr Davidow, Draper Fisher Jurvetson, and angel investors Reid Hoffman, and Joi Ito. The company’s last venture round was $7 million led by Draper Fisher in February, 2008. But Mohr Davidow, which held preferred shares, might have been the only investor to see any of those proceeds at all. Shutterfly disclosed the acquisition in an SEC filing, which only mentions Mohr Davidow as a recipient of some of the $1.3 million in cash.
It also mentions that Nancy J. Schoendorf, a managing partner at Mohr Davidow, sits on the boards of both companies. Although she did not vote on the acquisition, the connection raises the question of whether or not Mohr played a role in bring the deal to Shutterfly in the first place.
Tiny Pictures operates Radar, a mobile photo sharing app which never got a lot of traction beyond a core following. The service is actually pretty slick, centered around a photo commenting stream. You snap photos with your mobile phone which instantly is shared with your friends who also have the app. They can then comment on the photos.
It sounds simple enough, but the app never achieved a critical mass of users. The service is focused more on sharing life moments through photos with people you actually know than creating a public photo stream. So if you don’t know anyone who uses it, there is little reason to join yourself. The friends-and-family aspect must have appealed to Shutterfly, however, which is based on exactly that type of picture sharing. It already has a rich database of people who like to share photos with one another. Radar helps them extend that to mobile phones in a social and fun way.
Update: Tiny Pictures CEO John Poisson confirms that he will remain with the company at Shutterfly as VP, Tiny Pictures. He says that Mohr did not broker the deal in any way and that other preferred shareholders, including Draper, Hoffman, Ito, and himself, also saw some of the proceeds of the sale. As to what he’ll be doing at Shutterfly, he is kind of vague, but it has something to do with mobile social media, sharing photos, and self-expression.
It is a great loss for Tinypictures.Because they didn’t get what they invested in.
That’s a lot of money flushed down the tubes on a site no one has ever heard of.
never heard of it too, Chip
I was thinking the same, at first I thought WTF tinypic has been sold? Then realised it wasn’t tinypic.com but some other site I hadn’t heard of.
waa!it’s a lot!
“Tiny Pictures”? Never heard of, waste of money
Well then I think it is time for me to sell my site for as much money as I can get if this is the state of affairs!
I agree, M&A activity is there, however lately some of these exit prices seem to be about 1/10 of what we might have expected a year or so ago.
Expect to see an iphone app from Shutterfly with Radar features.
That probably is the outcome of many VC investments. How many actually profit, break even, or turn out to be 10x winners? There’s risk and the whole investment could be lost. Sometimes you take your losses and move on. Like with Tiny Pictures.
Just another Mohr Davido eff up, like Adapt Technolgies this is yet another flop for them, idiots!
Interesting buy for Shutterfly. Maybe they’ll be able to get the technology to a point of critical mass.
A reminder that a lot of web 2.0 “Companies” are really better as features for real companies.
http://www.traderbots.com
hmmm
http://www.krazzed.com/
Why would Shutterfly want to invest in a team that has burned through 12 odd million dollars in producing a service that no one really cares about? Great track record.
Shutterfly probably wants a younger audience and want to break out of the mommy/kiddie pictures they print. Good luck with that.
Tiny – hilarious name.
1/10 is the new 10x.
That was a very low price for Tiny Pictures.
I can’t believe these ’smart’ investors put in almost $12m in that idea!! Un-Fucking-Believable!