500px, the Toronto-based photo sharing service aimed at enthusiasts and pro photographers, has closed on $8.8 million in Series A funding dually led by Andreessen Horowitz and Harrison Metal, the company is announcing today. Others in the round include Creative Artists Agency, Rugged Ventures, Dustin Plett, and ff Venture Capital.
The startup has long since established a name for itself in the photography community, and has carved out a space for itself nearer the high-end of the market, while something like Yahoo’s Flickr, Facebook, Google’s Picasa (now Google+ Photos) have consistently gone after the much larger consumer space. But with the new funding, 500px has plans to move both up and down in the photo sharing market, company CEO Oleg Gutsol tells us.
The immediate focus, following the funding, will be on executing on 500px’s vision in developing a marketplace where its users can make money by selling their photos. “A lot of the users may not even realize that the photos that they share online have a commercial value,” says Gutsol, who explains that 500px wants that now to change. “Part of that will be through the commercial marketplace we build and promote online, and the second part will be through partnerships with various companies,” he explains.
Those partnerships could involve the licensing and distribution of photographers’ work through lifestyle chains who would resell the physical prints on paper, canvas, or metal, for example. Gutsol says 500px is in the early phases of discussions on that front today with several companies.
Meanwhile, the online marketplace will be developed in parallel, targeting a higher tier market than other stock photo sites like Shutterstock or Getty, with pricing ranging from around $250 to $500 per photo – a market segment which Gutsol notes has no clear leader at this time.
In addition, the funding will allow 500px to hire, tripling its now 25-person team over the next year to year and half, and opening up an office in the Bay Area, perhaps near Palo Alto, though the decision around an exact location has not yet been decided. Here, the company will focus on business development, while technical work will continue out of 500px’s Toronto headquarters.
Gutsol admits it was difficult to attract Toronto investors, which is why they previously raised their earlier funding* from New York VCs (ff Venture Capital, Deep Creek Capital, and High Line Venture Partners, e.g.). (*Technically, this latest round is 500px’s Series A-1, since the previous was called its Series A, back in 2011. But 500px didn’t raise a seed round, which is why they’re now referencing this new round as the A round instead).
The company has grown significantly since then, with some 100,000 users just two years ago, a million last year, and now 2.5 million users on its service. Meanwhile, the company’s paid plans ($25/month and $75/month), though making up a smaller overall percentage of the company’s user base versus its free plans, have helped contribute to 500px’s bottom line, allowing it to reach nearly $1.3 million in revenue by the end of 2012. 500px is now looking to double that (or more) this year, and then grow further with the marketplace launch, paid profile features, and other premium options.
Something More For Consumers
Some of those options will also include a more directed focus on the consumer segment than 500px has had in years past. “We have several things in the works that will bring the high-quality experience to the mass market,” says Gutsol, adding that this will include tools related to organization and presentation, arriving in the next 12-18 months.
“I don’t see too many companies focusing on bringing that high-quality experience to the average user who may not think of themselves as photographers,” Gutsol explains. “Instagram is great for that, but you do it on a one-by-one basis…so that diary is a little bit limited,” he says. “There’s definitely room for improving the consumer experience in this area.”
As a part of the new funding, Harrison Metal founder Michael Dearing will join 500px’s board, which today includes Gutsol, COO Evgeny Tchebotarev, and ff Venture’s John Frankel. Meanwhile, we’re told Andreessen’s Jeff Jordan will join only as “an observer” for now.