Picsart today announced that it raised $130 million from SoftBanks Vision Fund 2. Although the company declined to give more details, the new capital infusion will push the company's valuation above $1 billion.
According to PitchBook data in 2019, the company's previous round of capital valued it at approximately $600 million. Picsarts latest round of capital valuation can be derived from these two figures.
It's not difficult to understand why. TechCrunch spoke to the company earlier in the year and noted that it had reached the $50 million mark in ARR, and that they expected to reach the $100 million threshold. Today, the company stated that it had reached this goal. How far exactly? The company refused to disclose.
TechCrunch interviewed Tammy Nam, Picsart's COO, this week to tell TechCrunch that Picsart had surpassed a $100 million annual run rate and was worth more that a flat $1.0billion after the SoftBank round. We were unable to get any more information from her.
We can only say that Picsart is making nine figures of revenue starting with one and that it is worth ten figures which also start with one. Picsart has a maximum revenue multiplier of less than 20x. However, we believe the true figure will be in the low tens.
Picsart news is fun because its product is very cool. TechCrunch can't say the same about all unicorns. You have probably seen the work of its tools in action, both for professionals and consumers. They are also easy to use, unlike other HR-focused APIs, which can make it feel more tangible than others.
Picsart offers both paid and free services. Picsart's paid services include additional images that allow users to remove watermarks and other such features. Nam explained that the company offers a team-focused plan with multiple-seat purchase options. However, it is too early to know how the product is doing because Nam's team has not yet made the announcement to their users. She explained that it is currently in beta.
The company's monetization efforts are also succeeding. Picsarts growth in revenue is a good indicator. Nam added some context by saying that Picsarts had millions of subscribers today. Nam believes there is more potential for growth, explaining that even if her company tripled their gross subscriber count, it would still only be a drop in compared to the active user count. Picscart wasn't forthcoming with data. Picscart previously stated that it had 100 million monthly actives as of October 2017, 130 million in 2019, and 150 million more in 2018. Picsart claims it now has more than 150 millions.
Nam spoke out about the revenue mix of the company's business and consumer users. We believe Generation Z is the key Picsart user group. It is difficult to determine the exact revenue mix of the company at present. Nam stated that 30% of the company's total revenue was from business revenue, in an interview with TechCrunch earlier this year. This provides us with some direction for today.
In our chat, she also mentioned that Picsart's business usage was increasing as SMBs become more digital in the COVID-19 age. It will be interesting to see how this shift in market demand affects Picsarts revenue mix over the long-term.
What about an IPO? Unfortunately, this was only delayed. Picasart's recent capital raise is a great thing, but it can be a problem for anyone looking to obtain more S-1s quickly. Large capital events can slow down liquidity, as the company in question needs to put the funds to use.
We are confident that Picsart will be able to meet its final private valuation if it files at a moderate growth rate. We only want it to happen quickly.
