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EyeEm, the photo marketplace, changes hands as Freepik picks it up out of bankruptcy

EyeEm, the Berlin-based photo marketplace that once was loftily thought of as a possible challenger to Instagram in Europe but more recently has fallen on much harder times, has a new owner. Freepik — a Spain-based platform partly owned by EQT that provides images, graphics, and other media for designers and other online creatives — is acquiring the firm from Talenthouse, which had placed EyeEm into bankruptcy as part of a wider restructuring of its business.

The plan will be to integrate EyeEm’s existing photo library — which totals some 160 million images, with a wider community of close to 150,000 photographers, the company tells me — into Malaga-based Freepik’s platform. It’s unclear yet if that will mean losing the EyeEm branding over time altogether.

Freepik’s CEO Joaquin Cuenca Abela said in an interview that EyeEm will improve Freepik’s photography offerings.

“We had photos already but ours were not good enough,” he said of Freepik’s library of some 72 million vectors, videos, illustrations and other images. “EyeEm has a big library and community, and it’s a way of getting more photos on our platform.”

He added that Freepik plans to monetise more of that content than EyeEm or Talenthouse had in the past, and to explore how to bring more AI into the equation for creators on the platform “where it makes sense,” meaning not to replace but complement photographs that do not use it.

“We see many people use AI, and we think of it like another tool, like a camera: some people will be better at using AI in pictures than others,” he said.

The company is not disclosing how much it paid for EyeEm, but for some context, Talenthouse paid $40 million to buy it in 2021. There has been only a skeleton crew of three people working on EyeEm recently, led by longtime EyeEm employee and most recent CTO, Peter Willard.

Another top priority will also be to finally pay out money owed to photographers and other creatives who had been using EyeEm but had stopped getting paid due to the various financial problems, he said — an issue that, if not resolved, would have hampered future credibility with the photography community.

Talenthouse, a self-described creative “ideation” platform founded in the U.K., also owns a raft of other struggling digital brands including Ello. (Freepik confirmed it’s not buying or interested in any of these.) Talenthouse picked up EyeEm in 2021 ahead of going public in a splashy IPO in Zurich (with requisite FT story).

Later, as Talenthouse struggled with profitability and financing and tried to stave off its own collapse (an effort still in progress), it put EyeEm into its own bankruptcy protection in Germany.

When EQT picked up its stake in Freepik 2022, local reports estimated the startup to be valued around €250 million. Cuenca Abela said this week that the stake was a minority share and that this was an inaccurate figure. The company’s last annual report, from 2022, noted that it made $87 million in revenues, up 25% year-on-year. It currently has around 100 million users and it’s been profitable for years.

Picking up EyeEm is a little picking up a piece of European consumer internet history.

The startup — founded by Florian Meissner, Lorenz Aschoff, Gen Sadakane, and Ramzi Rizk (someone please write a profile of Ramzi and title it “Rizky Business”) — burst out of the gates in 2011, exactly at the time when all eyes were starting to train on Europe, and specifically Berlin, to possibly write the next big chapter in the world of startups.

E-commerce clones, based out of the city and financed by the Samwer brothers, were raising hundreds of millions of dollars and going global; Apple, Microsoft and Google were snapping up small teams across the continent building cutting-edge technology in AI and other fields (Google bought DeepMind in 2014, for one); and it felt like current hegemony was being disrupted (or perhaps just starting to take shape), with a wave of new apps hitting the market making the best use of smartphone features to build audiences around the latest innovations.

EyeEm first launched in August 2011, as apps like Instagram were getting going. The inevitable comparisons in those early days came in fast. The startup quickly scaled to 8 million users at was averaging 1 million downloads/month at one point, and it had big ambitions not just to create a platform for people to upload and share photos, but to monetise them, early on building out a marketplace for creators.

It also put effort into R&D and applications fuelled by AI: these included concepts for “visual search” and machine learning algorithms that aimed to figure out what was “visually appealing” about images. Between being founded in 2011 and 2018, EyeEm raised substantial funding, especially for a European startup: its backers included Valar, Earlybird, Wellington and Passion Capital.

Whether it’s a story about the struggle to scale a consumer (or any) startup in Europe, or whether it was just overrun by the combination of much stronger players in stock photos and the world of photo sharing (Instagram powered by Facebook/Meta seemed invincible for a while there), EyeEm eventually did lose momentum, and then Talenthouse came knocking.

EyeEm’s new owner Freepik, founded in 2010, arguably also was birthed in that same era, although it is a different kind of startup story: profitable almost from day one, bootstrapped before the EQT stage and not in the market to raise more now, lean and modelling itself a bit on Adobe it seems. (Tellingly I talked to Cuenca Abela while he was in California for Adobe Max.) 

source: TechCrunch