Israeli developer of popular apps for creators nabs $130m investment
Lightricks, a Jerusalem-based software startup that makes photo and video editing apps, raised $130 million in a Series D investment round at a valuation of $1.8 billion, the company announced on Sunday.
The round was co-led by New York-based global private equity and venture capital firm Insight Partners and Hanaco Venture Capital, with participation from existing investors Goldman Sachs Asset Management, Clal Tech, Harel Insurance and Finance and Greycroft. New investors Migdal Insurance, Altshuler Shaham and Shavit Capital also participated in the round.
Founded in 2013, Lightricks developed a number of photo and video editing tools that are widely popular with content creators on social media networks, especially Instagram, the highly visual content platform owned by Facebook. The company’s suite of 11 apps including Facetune, Facetune Video, and Videoleap has over 500 million downloads worldwide across Android and Apple users, Lightricks has said.
Facetune, the company’s flagship app used to enhance and retouch photos (think tooth whitening and blemish removal) has previously earned accolades such as Apple’s App of the Year and Google Play’s Best of the Year. The app VideoLeap, which offers powerful editing tools for video content, is one of the most widely used tools to create Tik Tok content, the company indicated.
The apps are geared for individual consumers, beginners and professionals, as well as businesses and brands. Lightricks uses a freemium model for the tools, which offers some functions for free while other features require payment to unlock.
Dr. Zeev Farbman, co-founder and CEO of Lightricks, told The Times of Israel on Sunday that business and brand customers present a huge opportunity for the company as it establishes itself “not just as a toolmaker but also a service provider for content creation.”
“We are looking to help people and businesses draw in their audience and engage with them,” he said.
The company said in a statement that it will use the fresh funding to expand and create new platforms and tools for content creators in an effort to “become a one-stop-shop for resources including creative tools, services, and monetization opportunities.”
Farbman said the funding is a sort of “war chest” with which to acquire similar or related companies and startups to leverage their user base for Lightricks’s growth.
He estimated that the company might be “ready for IPO [initial public offering] in about a year.”
“Our mission has always been to continuously strive to bring creators the most advanced technology and help them find new ways to express themselves,” Farbman said in the company statement. “The rise of the creator economy has only exacerbated the need of mobile users to streamline the content creation and monetization processes. With this latest funding, we’re able to help elevate our users’ creativity and capabilities with continued advancements to our technology and offering.”
The creator economy — an industry of bloggers, influencers, brands, photographers and videographers monetizing their online presence — has an estimated total market size of $100 billion and has seen $1.3 billion in funding for US creators in 2021 alone, according to New York-based research firm CB Insights.
Lightricks reported “tremendous growth” over the past year with the COVID-19 health crisis driving people to tap their creativity “to express themselves and earn income during the pandemic.” The company says it saw a 90 percent increase in app usage across its creativity tools in the US alone.
Worldwide, it says, its users develop over a billion creations per year on the company’s apps.
Farbman confirmed that Instagram is the biggest platform for users of Lightricks’ tools “with Tik Tok playing a bigger part overall and Snap seeing a resurgence.”
“The creator economy has changed the way we, as a society, experience social networks,” said Pasha Romanovski, co-founding partner of Hanaco Ventures. “Audiences constantly consume information through the different content channels daily. Lightricks’ platform enables creators to have a broader, more professional and higher-quality set of tools to optimize content.”
Lightricks was founded by Farbman, Nir Pochter, Yaron Inger, Amit Goldstein, Itai Tsiddon, almost all with a computer science or artificial intelligence background. The company is headquartered in Jerusalem with offices in the UK. Most recently, Lightricks opened an office in China to focus on tapping into the country’s huge potential user base. The company employs approximately 500 people.