Last week, GIF-finding platform Giphy revealed a new line of business offering artist-created stickers in Apple’s iMessage app. But what it didn’t announce was that it also made an acquisition to bolster this new sticker strategy. TechCrunch has learned and confirmed that Giphy quietly acquired imoji, a startup that had developed a popular platform for creators to build and distribute custom-made stickers and emoji to the messaging masses.
Terms of the deal, which completed at the end of last year, were not disclosed. The acquisition includes all of imoji’s technology, including its platform for creators, as well as the whole team, which appears to include eight people, although some of them may not be full time. The founders of San Francisco-based imoji — Jason Stein, Daniel Brusilovsky, Nima Khoshini, Kirk Lacob, Thomas Smith, Ben Draa — include several ex-Apple engineers, as well as three people who also hold positions at the Golden State Warriors, the local pro basketball team.
We were originally tipped off to a possible acquisition by a reader who noticed that imoji’s apps (one for iMessage stickers, and one for stickers for other text messages) suddenly started to note that Giphy Inc was the owner of the app. Then, after we reached out to both companies to ask about them, the apps suddenly disappeared. You can see the cached versions of them here and here.
Now we understand that both apps will be making their way back to the App Store soon, along with the rest of the imoji business. Giphy plans to keep imoji’s standalone services — all services for artists, API partners, and general users — continuing as normal while also integrating some of the tech into its bigger platform for new services… and to fill out their collective vision of the world.
“GIPHY and imoji, GIFs and stickers, it’s all working towards the same goal; making our conversations more rich, more expressive, through easy to use and incredibly fun animation,” said Stein, COO, in an email sent to us confirming some of the details of the deal.
“Building imoji has been an amazing journey; we’re proud to have developed a product that was used by so many people every day,” added Khoshini, imoji’s CTO. “By partnering with GIPHY, we’re able to continue this journey and bring joy to more people across the world.”
Giphy, originally incubated at Betaworks, has been a breakout hit in the consumer startup world, tapping into the craze for GIFs in social media, where they are used with reckless abandon by many a Slacker, Tweeter, Redditor and others who love to insert short moving pictures instead of words to present their two cents to the world.
To date, Giphy has raised $151 million and is now valued at $600 million — a valuation that it perhaps now needs to fill out with more business growth, hence the sticker launch and the acquisition of Imoji to expand that platform.
By comparison, imoji is small but mighty. The company — borne out of the trend of messaging apps opening up themselves as platforms to third party content — had raised only around $2 million, according to CrunchBase. But the money came from a pretty interesting group of investors. They included Joe Lacob, father of co-founder Kirk, partner at Kleiner Perkins, and majority owner of the Warriors; and Chi-Hua Chien and Erik J. Kim of Goodwater Capital. Chien previously was also at KPCB, and Kim was at Maverick Capital.
And it had been growing on both sides of its marketplace — with creators and with sticker users. As of September 2016, imoji had over 80 developer partners and a reach of 15 million active users each month, with “billions” of stickers sent per month and close to two billion content impressions over 200 million search requests per month (this is in reference to the results you get back when you search for a particular image).
As of September last year, it started to gear up for making money: imoji’s basic service is free to use, but last year the company said it was preparing to open its creators’ platform to paying brands.
This is a potentially lucrative area. Line, the most popular messaging app in Korea and Asia, grossed $280 million from selling stickers in 2015 and Twitter is also charging brands to offer promoted stickers to users, a business that Snap’s Snapchat has also tapped.
Giphy, it seems, had already been considering how it would move deeper into the area of stickers. “The Artist Sticker Apps came out of conversations the Giphy Arts team has been having with creators around ways we can help them get their work to the masses and get paid while doing it,” said David Rosenberg, director of business development at Giphy, told us.
And this, essentially, is why Giphy chose to acquire imoji: it gives the bigger company an instant platform to build out this business, an existing customer base to get it started, and another revenue-generating vehicle in the form of stickers-as-commercials, by way of paying brands.
The move also points to some consolidation in the world of creative social media tools. Things like stickers and GIFs are features by their very definition, dependent on having platforms happy to host them. But those who are building businesses around them are clearly trying to carve out a place for themselves as platforms in their own right.
“It was quickly clear to us that imoji shares many of the same philosophies and values as Giphy, as well as similarities in the ways it manifested; we both work with content partners, nurture a community of artists, power visual communication for many platforms through our APIs, and constantly push the technology behind it all,” said David Rosenberg, Giphy’s business development director. “As we explored ways to work together, we began exploring what a deeper relationship might look like and, as of late last year, made it official! 2017 will be a great year for GIPHY and we’re incredibly excited to have the imoji team come on board.”
This is Giphy’s third acquisition, after buying GIF messaging app Nutmeg and GifGrabber, a tool for making GIFs on your Mac, which is now known as Giphy Capture. This doesn’t seem to be the end of Giphy’s M&A story: Rosenberg hints that there have been some other acquisitions at Giphy that we haven’t about, or that Giphy may be planning to make soon.
“It’s fun to work with like-minded people in the space; that’s why we always want to do it. We collaborate, we compliment and sometimes we form a deeper partnership,” he said. “Our goal is to make sure everybody benefits. As it happens we’ve been fortunate to form deeper relationships with Nutmeg, GIF Grabber, and now imoji…just to name a few.”