Toronto startup secures $8.8 million in funding; plans Silicon Valley expansion

TORONTO – Photo-sharing service 500px has secured $8.8 million in funding which will help the Canadian startup make the move to the ‘Promised Land’ of technology – Silicon Valley.

The early-stage funding, announced by the Toronto-based company Wednesday, is led by two Silicon Valley venture capital firms, Andreessen Horowitz and Harrison Metal, and marks the company’s first big institutional investment.

“This new round of funding gives us access to the world’s best strategic advisors and provides the resources we need to speed up our innovation pipeline and focus on rapid international growth,” says Oleg Gutsol, co-founder and CEO.

Gutsol and his team ran the company for about two years without gaining any outside capital, generating revenue from user’s premium accounts – ranging from $25 to $75 per year – and some seed-round fundraising.

But, the funding announcement marks a new chapter for the company, which has remained grounded in its Canadian roots since being founded in late 2009.

500px – used by aspiring and professional photographers to share and sell work – will soon open an office in the heart of Silicon Valley with hopes to invest in some of the talented individuals looking for work in the technology capital.

“I think the kind of talent that we will be able to find in California will be different from what we find here,” Gutsol told Global News Wednesday.

“We need to increase our team – our team is quite small, only about 20 people right now – we are looking to triple the size of the team in the next year or so.”

Currently the 500px team consists solely of Canadian-based developers, designers and other team members. Though Gutsol said they plan to keep their development office in their hometown of Toronto, they plan to hire both developers and designers in both California and Toronto.

“Most of the technical people we will try to find in Toronto,” Gutsol added.

An expansion of the 500px team will also benefit the vast community of photographers using the site.

500px has quickly become of the premier photo-sharing sites online. The company has seen its user base more than double in the past year with 2.5 million users.

Gutsol and his team – including co-founder Evgeny Tchebotarev – hope to reward their users by creating more licensing opportunities for photographers.

More licensing opportunities means more money for photographers – something Gutsol and Tchebotarev know very well as photographers themselves.

“Over the years we have gathered a very strong and very passionate group of people who are very good at photography,” said Gutsol.

“The photos that they share on the site have great value and we would like to help unlock the value and generate meaningful income for those people.”

Currently 500px offers personal distribution licenses for photos uploaded to the site.

Users can sell their photos as canvas prints, or as individual HD downloads for personal use. But, this doesn’t present any opportunities for commercial licensing.

“Prices are significantly higher in those cases. If you are licensing a photo for an ad in a magazine the photographer will get some meaningful commissions.”