The New York-based but originally Ukrainian stock photo agency Depositphotos has gained a combined $5 million in funding from the European Bank for Reconstruction and Development and U.S. venture fund TMT Investments, the company announced on Dec. 17.
EBRD, via its venture capital investment program, gave the company $4 million. This marks the London-based financial institution’s first investment in Ukraine’s dynamic IT industry. TMT Investment, which invested $3 million in the company in 2011, had contributed $1 million in the round.
“(Depositphotos), which generated just a few tens of thousand dollars in revenues when we initially invested in them, currently makes tens of millions annually,” head of investment at TMT Investments Artem Inyutin said on Dec. 17.
According to the terms of the deal, the EBRD has acquired a minority stake in Depositphotos. The founder, Dmitry Sergeev, will retain majority ownership of the company.
He says EBRD funding will be used to accelerate growth and expand research and development operations only in Ukraine.
“Initially, it was planned to use all the money on developing a local office (in Kyiv), hiring new people, who will be able to carry out different tasks more professionally, and on marketing activity,” Sergeev told the Kyiv Post. “Particularly EBRD’s investments will be spent only in Ukraine – that was a primordial condition of the agreement.”
Expansion into developing markets are also the company’s focus, according to Sergeev, including Brazil, Turkey, and former Soviet Union.
“Technologically, we are much stronger than some of our rivals, but they entered the market earlier,” Sergeev said. “That is why they dominate in the West, in the U.S. Our goal is to occupy eastern Europe, Brazil and Turkey, become number one on developing markets and become an interesting goal for either future takeover or IPO.”
“Investors put trust in this strategy,” he said.
DepositPhotos, which has more than 40 million royalty-free images, videos, and vector graphics for sale, was founded in Kyiv in 2009 and now boasts 10 million monthly visitors to its website. Like many IT firms with Ukrainian roots, it is now based in the United States, in New York. The company serves customers from practically every country in the world, providing round-the-clock support in 20 languages.
Employees of DepositPhotos work at the company’s Kyiv office on June 24. (Courtesy)
Professional and amateur photographers, illustrators and artists provide the service with content. They get up to 75 percent of the price of each purchased unit, while the rest goes to the company. Users can register on the website and buy any image, video or vector graphic for $1-$80. Frequent users benefit from various discount price packages as well.
The company is already successfully competing with market leaders in Western countries such as Getty Images and Shutterstock.
“When we started developing Depositphotos in a basement office in Kyiv, we could hardly imagine that one day an investor such as the EBRD would support us,” Sergeev said.
Kyiv Post staff writer Denys Krasnikov can be reached at [email protected]. The Kyiv Post’s IT coverage is sponsored by Looksery, Ciklum, Steltec Capital and SoftServe. The content is independent of the donors.
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