The Berlin-based picture marketplace EyeEm was previously loftily regarded as Instagram’s potential European rival. Has recently seen significantly rougher circumstances, and a new owner has taken ownership. EyeEm was purchased by Talenthouse in 2021, and it filed for bankruptcy earlier this year as part of a larger restructuring of the Talenthouse business. Talenthouse is selling the company to Freepik, a Spain-based platform that is partially owned by EQT and offers images, graphics, and other media for designers and other online creatives.
The idea is to include EyeEm’s current picture collection, which has over 160 million photos and a larger community of close to 150,000 photographers, into the platform of Malaga-based Freepik. If it means eventually dropping the EyeEm logo entirely, that is not yet obvious.
Although Freepik keeps quiet about the price it paid for EyeEm, Talenthouse spent $40 million to acquire it in 2021. Recently, only a three-person skeleton staff has been working on EyeEm under the direction of Peter Willard, a longstanding employee and the company’s most recent CTO.
Joaquin Cuenca Abela, CEO of Freepik, stated in an interview that the addition of EyeEm will enhance the company’s photographic services. Of the roughly 72 million vectors, movies, graphics, and other pictures in Freepik’s database, he added, “We had photos already, but ours were not good enough.” EyeEm has a sizable community and library, and it’s a means to increase the number of photographs on our site.
He continued by saying that Freepik intended to monetize such material more than EyeEm or Talenthouse have in the past and to investigate how to incorporate more AI for creators on the site “where it makes sense,” that is, to complement rather than replace images that do not utilize it.
According to him, some individuals will better utilize AI in photographs than others. “We see many people use AI, and we think of it like another tool, like a camera,” he added.
Another top priority, according to him, will be to finally pay out money owed to photographers and other creatives who had been using EyeEm but had stopped getting paid as a result of various financial issues. EyeEm’s credibility with the photography community would have suffered if this issue weren’t resolved.
Ello was one of several failed digital firms that Talenthouse, a self-described creative “ideation” platform based in the UK, has acquired over the years. (Freepik indicated it is not interested in or planning to purchase any of these.)
Before making a splashy initial public offering (IPO) in Zurich (with the required FT story), Talenthouse purchased EyeEm. Later, however, when Talenthouse struggled with profitability and finance, it attempted to prevent its demise (which is still being made) and filed EyeEm for bankruptcy in Germany.
When EQT acquired its interest in Freepik in 2020, local news sources in Spain estimated the startup’s valuation to be approximately €250 million. Cuenca Abela said last week that the amount was incorrect and the holding was a minority part, but he failed to provide a more precise one.
In its most recent annual report from 2022, Freepik stated that it generated $87 million in revenues, up 25% from the previous year. This shows that the company is expanding and has seemingly bounced back from some of its setbacks, most notably a data breach that affected more than 8 million customers three years earlier. It has been lucrative for many years and has about 100 million members.
EyeEm can be seen as a little piece of European consumer internet history. The startup was established in 2011 by Florian Meissner, Lorenz Aschoff, Gen Sadakane, and Ramzi Rizk (please write a biography of Ramzi and call it “Rizky Business”). At the time, everyone’s attention was focused on Europe, particularly Berlin, as the potential location for the next major chapter in the history of startups.
The Samwer brothers were funding city-based e-commerce clones, generating hundreds of millions of dollars and expanding internationally. Small teams throughout the continent developing cutting-edge AI and other technologies were being purchased by Apple, Microsoft, and Google (Google, for example, purchased DeepMind in 2014). A flood of new applications entered the market, maximizing smartphone functionality to attract users to the newest advancements. This gave the impression that the tech hegemony was in danger of being overthrown (or perhaps was only beginning to take shape).
In August 2011, just as applications like Instagram took off, EyeEm debuted. In those early days, the expected parallels poured in quickly. The startup swiftly reached 8 million users and, at one time, averaged 1 million downloads each month. It had lofty goals: to construct a platform for users to publish and exchange photographs and monetize them. It established a marketplace for producers and gave everyone a chance.
Meissner informed us when it raised its Series A that “we don’t talk amateurs or professionals in photography.” “We came up with the moniker ‘Notogs. Each of us has a photographer within.
It also invested in research and development and applications powered by AI. These included ideas for “visual search” and machine learning algorithms that sought to discover solutions to arcane issues like what makes some photos aesthetically appealing.
EyeEm raised a sizable amount of money between its 2011 founding and 2018 launch, which is particularly impressive for a European business. Its backers included Valar, Earlybird, Wellington, and Passion Capital.
Whether it’s a tale of the difficulties scaling a consumer (or any) startup in Europe or whether it was simply beaten by the likes of much more powerful players in the stock photo and photo-sharing industries (Instagram powered by Facebook/Meta seemed unbeatable for a while there), EyeEm eventually lost steam, and that’s when Talenthouse showed up.
Although it is a different sort of startup story—profitable virtually from day one, bootstrapped before the EQT stage, unable to get more funding at this time, lean, and perhaps modeling itself somewhat after Adobe—EyeEm’s new owner Freepik, formed in 2010, was likely also born in that same era. (While Cuenca Abela was in California for Adobe Max, I spoke with him.)