Shutterfly Acquires Penguin Digital, Makers Of Mobile Photo Print Shop App “MoPho”

Shutterfly, the photo and personal publishing company founded in 1999, has today acquired Penguin Digital, a company whose flagship product is an iPhone application called Mobile Photo Factory, or just “MoPho” for short. The app allows users to print out physical copies of photos saved in their iPhone’s camera roll and on other social networks like Facebook and Instagram, as well as print those photos onto gifts like bags, key chains, mugs, iPhone cases and more.

Terms of the deal were not immediately available.

In addition to its standalone application, Penguin Digital also offers a developer-facing product with the Penguin SDK. This allows other app makers the ability to integrate the same sort of photo-printing capabilities into their own mobile applications on iOS, and is now available in a few dozen iPhone apps. Going forward, Shutterfly will investigate whether or not this could be used to help it gain further traction on mobile.

According to Shutterfly, the MoPho mobile application will be rebranded and updated over the next few months and will be added to Shutterfly’s current mobile application line-up which already includes the Shutterfly iPhone and iPad apps, as well as the forthcoming birthday card app called Treat, arriving on iOS in days. “The acquisition of Penguin Digital supports our mobile strategy aimed at giving consumers better ways to engage with their photos and personalize products on the go,” Jeffrey Housenbold, president and CEO of Shutterfly, noted in statement.

“We had been working on a number of mobile initiatives,” Housenbold told us on the phone this morning, “and we thought this was a nice complement to what we were doing. I reached out to Reuven, and we had some conversations. I thought he was an extremely bright young man, and they did a great job.”

Housenbold says the most popular categories were photo prints, mugs and iPhone cases, and the app would be rebranded and expanded after the holidays with more print options. Plus, Shutterfly will determine which products to cut and which to add going forward. More importantly, because the company has its own manufacturing, the quality of the photo gifts is set to improve, he adds. Support for more social networks, including of course Shutterfly, is also in the works.

Penguin Digital was started in 2010 and had $1 million in seed funding from N.Y. investors including Globis Capital. Founders Josh Friedman (of PicsCliq) and Reuven Moskowitz, along with the rest of the 11-person team, will now join Shutterfly’s tech center in NYC.

Shutterfly’s Growth Through Startups

Shutterfly has a long history of acquiring startups to help round out its product offerings: back in 2009, it bought a photo-sharing app called Tiny Pictures, which it later used to roll out an iPhone and web app called Wink. That was the only deal where the product is no longer up-and-running due to lack of traction and consumer interest. In March 2011, it picked up online stationary company called Tiny Prints, which sold cards, invites, and photo books. It also bought Nexco which became Shutterfly share sites (private photo-sharing networks) and Photoccino, which had developed 29 algorithms for sorting through photos. That latter option is being integrated into Shuttefly’s own properties now through Q1 2013.

Combined, Shutterfly has brought in around 350 employees through startup acquisitions and now has a team of 1,050 employees total. Penguin brings in 11 employees, who will be working on the rebranded MoPho experience and on other mobile apps in the future.

And while not a startup, one of Shutterfly’s bigger deals as of late was the March 2012 acquisition of bankrupt-ridden Kodak’s online photo-sharing platform for $23.8 million. Kodak’s network had a user base of 75 million at the time, but not all of those were active users because of how Kodak forced sign-ups. To date, “millions” of Kodak users ported over 5 billion photos to Shutterfly, says Housenbold, bringing Shutterfly’s total photo database to 15 billion.