US company VistaPrint acquires Ukraine’s Depositphotos for $85M together with an image bank, online editor Crello, and other projects
VistaPrint acquires Depositphotos for $85M. Dmitry Sergeev, a founder of Depositphotos, shared the details with AIN.UA.
A Ukrainian developer of the image bank Depositphotos and the online graphic design platform Crello changed the owner. The American company VistaPrint purchased 100% of its shares. The $85-million deal became the largest deal in the Ukrainian IT market for the last few years. AIN.UA will share with you details of the Depositphotos acquisition and its further steps.
In a nutshell:
- The deal value is $85 million. VistaPrint purchased all 100% of the company; all its shareholders sold their stocks.
- Dmitry Sergeev is completely withdrawing from the project.
- Depositphotos will be further developed; Crello will become VistaCreate.
- The office in Ukraine will work further, and the new owner plans to extend the local team.
The acquiring company
VistaPrint is a major US-based company in the design and marketing industry. It is part of Cimpress, which is listed on the Nasdaq. VistaPrint’s main clients are small businesses worldwide, and it has a wide range of design and printing services. Its divisions deal with content for Facebook, Instagram, TikTok, and other social media —developing logos, websites, and other branded materials, and printing all promotional materials: from stickers and packaging to banners.
The company was founded by a French entrepreneur, Robert Keane, back in 1998. Since then, it has grown into a business with an annual revenue of over $1.4 billion. It has 17 million small business clients, serviced by 29 offices around the world, and employs about 6,000 people.
Terms of the deal between VistaPrint and Depositphotos
- VistaPrint purchased 100% of Depositphotos, including all its projects, for $85 million: Depositphotos, Crello, Lightfield, Bird In Flight, and WAS.
- All former shareholders, including the EBRD and TMT Investments, agreed on the deal:
“Some of our investors were with us for a very long time, for example, TMT Investments 10 years, the EBRD 6 years. The venture business is about discovering the right moment to enter business and then quitting it with profit. For the investors, the deal with Cimpress was a real chance to quit the business and make money. All of them supported my plan and our team, and I gave the investors a chance to quit,” said Dmitry Sergeev, founder of Depositphotos.
- TMT Investments sold its stake in Depositphotos at the beginning of October: 16.7% was sold for $14.3 million.
- Founder, Dmitriy Sergeev, is leaving the management of the company.
- Now the ex-manager of Depositphotos, Vadym Nekhai, will join Vista as the VistaCreate (Crello) and Depositphotos VP and continue to lead both teams under the supervision of the Vista International Business President, Florian Baumgartner.
According to Dmitry Sergeev, VistaPrint has initiated the deal with Depositphotos. The negotiations, due diligence, and closing of the deal took several months — almost all procedures have been done remotely. There was only one offline meeting in Kyiv with European and American representatives of VistaPrint. The deal was planned to be closed in autumn 2021. But because of waiting for the Ukrainian Anti-Monopoly Committee’s approval, it happened a bit later, on October 1, 2021.
- For VistaPrint, this deal is a part of their $250-million transformation plan. During that transformation, VistaPrint will develop the full-stack design. For that purpose, they purchased a designer marketplace in October 2020 and recently bought Depositphotos.
- The Depositphotos team sees here a possibility to strengthen their market share:
“Apart from the profit, my personal motivation is to give the team and the product a chance not only to solidify their market share but also transform into a competitive product within the short period of time and become a market leader. I believe that VistaPrint will empower Depositphotos and Crello accordingly. In my opinion, it looks like a perfect theoretical business scenario of the fusion with a large player to win the market together. If you will make a wrong decision, the risk of loss is too high,” Sergeev said.
Team in Ukraine
After the deal, the Ukrainian company plans to extend the personnel and hire workers for Depositphotos and VistaCreate, or other VistaPrint products if needed. The company also confirmed to AIN.UA that they want to hire preferably in Ukraine:
“In Ukraine, there are many talented engineers, product managers, and marketers who can reinforce our teams. The company also plans to expand the VistaCreate 24/7 customer service in all countries and main languages with both live chats and hotlines.”
We also have asked about the fate of the Lightfield studio and Bird In Flight and WAS publishers. The answer was that all current projects continue their work.
Depositphotos added that there was an option pool due to EBRD’s investment, and now it is split between the Executives of the company. After closing the deal with VistaPrint, all option holders could realize them. The Executives that participated in the deal have got large bonuses.
There was a long way to this deal. The first significant project of Sergeev was the DepositFiles web hosting service. It was sold in 2009. The exact value of the deal is still unknown, but the media say $2 million would be too much.
In the same year, Sergeev launched his new project — Depositphotos. For two years, the startup has developed with its own funds, and in 2011, they got investment from TMT Investments: $3 million for the 27% share. Its capitalization estimate was $10 million.
In 2012, the company already had revenue of $6 million a year, and in 2015, Depositphotos raised the next funding round: $4 million from the EBRD, and $1 million from TMT. In 2016, TMT partially sold a stake in the company for $5.8 million, keeping 16.7%. At that time, the company was already worth $82 million. Depositphotos has raised $8 million since its inception.
You can read a more detailed story of the company in the article of AIN.UA: