Picsart Raises $130M, Achieves Unicorn Status - Visual Creator Tools

Picsart Secures $130 Million in Funding

Picsart has announced the successful completion of a $130 million funding round, spearheaded by SoftBank’s Vision Fund 2. This new investment elevates the company’s valuation to over $1 billion, although specific details regarding the exact figure were not disclosed.

Valuation Growth

Data from PitchBook indicates that Picsart’s previous funding round in 2019 resulted in a valuation of approximately $600 million. Consequently, a substantial increase in valuation is evident with this latest investment.

Revenue Performance

Earlier this year, TechCrunch reported that Picsart had surpassed $50 million in Annual Recurring Revenue (ARR). The company anticipated exceeding $100 million in ARR this year, a goal that has now been achieved.

The precise extent of this revenue achievement remains undisclosed, however, the company confirmed it has surpassed the $100 million ARR mark.

Financial Metrics

According to Tammy Nam, Picsart’s COO, the company is currently operating with a run rate exceeding $100 million. She also stated that the SoftBank round has valued the company at more than $1.0 billion.

This positions Picsart with revenue in the nine-figure range and a valuation in the ten-figure range, suggesting a revenue multiple of under 20x, likely falling within the low tens.

The Appeal of Picsart’s Product

Beyond the impressive financial figures, Picsart’s product itself is noteworthy. The company develops both mobile and desktop image and video editing tools for a diverse user base, including consumers and professionals.

As a result, content created using Picsart’s tools is frequently encountered, making the startup feel more accessible than many others focused on specialized areas like HR APIs.

Monetization Strategies

Picsart offers both free and paid services. Paid subscriptions provide access to additional resources, such as expanded image libraries and watermark removal features.

The company also provides a team-based plan with multi-seat purchasing options, currently in a beta phase with early performance data still being collected.

Subscriber Base and User Growth

Picsart’s monetization efforts are proving successful, as evidenced by its revenue growth. The company currently boasts millions of subscribers, with significant potential for further expansion.

Nam indicated that tripling the current subscriber base would still represent a small fraction of the total active user base. Picsart previously reported 100 million monthly active users in 2017, 130 million in 2019, and around 150 million earlier this year, and now confirms exceeding 150 million today.

Revenue Mix: Consumer vs. Business

The distinction between consumer and business users is becoming increasingly blurred, particularly among Generation Z, a key demographic for Picsart. This complicates the analysis of the company’s revenue mix.

Earlier this year, business revenue accounted for approximately 30% of Picsart’s total revenue, providing a useful benchmark for understanding the current revenue distribution.

Impact of COVID-19

Business usage of Picsart has been on the rise, driven by the increasing digitalization of Small and Medium-sized Businesses (SMBs) during the COVID-19 pandemic. The long-term impact of this trend on Picsart’s revenue mix remains to be seen.

Potential for an IPO

An Initial Public Offering (IPO) may have been postponed due to this substantial funding round. Large capital infusions often lead companies to prioritize deploying the new funds before pursuing liquidity events.

However, given a reasonable growth trajectory, Picsart is expected to achieve or surpass its current private valuation upon filing for an IPO.