Is Hipstamatic, the iPhone photo app that was an early hit on the App Store, on the rocks? TechCrunch understands that Synthetic, makers of the app, has recently had to let go of much of its engineering staff, among others, as part of a wider restructuring as it looks for cash. A number of public tweets (embedded below) also point to people leaving.
The news comes as a surprise, given that Synthetic says that it has been profitable since the second week after it launched. It is projected to make $22 million this year (from $10 million in 2011). Contacted for a response to the news, a spokesperson confirmed that Hipstatmatic is restructuring but nothing more: “Business is moving forward as usual, and we’re heads down focused on making beautiful, creative and fun products for our community and the world.” The company to date has never had VC backing.
TechCrunch has been told from a reliable source that among those who are no longer at the company are Jon Wight (iOS Engineer), Justin Williams (iOS Engineer), and Stuart Norrie (designer), who were all let go today with severance. Kevin Smith (iOS/Rails Engineer) left on his own earlier in the week. In fact, our source says that apart from the “core team,” everyone (including the office manager, and the social media manager) is being let go. There are some who work there on contract who may be exempt from this move.
As a paid app, Hipstamatic competes against a number of free and freemium apps that offer many of the same features of taking photos, applying filters and then sharing these pictures. Instagram is perhaps the most prominent of these. Ironically, before Instagram got gazumped by Facebook, it had struck a landmark deal with Synthetic for Hipstamatic photos to get imported into people’s Instagram feeds — the first deal of its kind. Pre- any news of Instagram getting acquired, the move hinted at possible business models that involved printing and other services that Hipstamatic offers to its users, which Instagram did not.
Hipstamatic currently has 4 million users, but it’s not clear how fast that number has grown, and whether it is picking up users now as quickly as it was in its earlier days. Hipstamatic may have had a blockbuster amount of downloads in its early days, and it may have been hard to sustain that. And as you go down the App Store charts, it gets harder and harder to be seen. It’s a slippery slope.