US firm acquires Ukraine-founded Depositphotos for $85 million

Ukraine-founded stock photo website Depositphotos has become a part of publicly-traded U.S. holding Cimpress, currently valued at $2.3 billion.

Cimpress’ subsidiary VistaPrint, which creates business cards, websites, and merchandise for small and medium-sized businesses, bought Depositphotos for $85 million, Depositphotos CEO Vadim Nekhai announced on Oct. 27.

As a result of the deal, Depositphotos and its graphic design startup Crello — now called VistaCreate — could attract more investment to develop its technology, launch new products and expand on lucrative markets like Europe and the U.S.

It is also an opportunity to attract more clients, Nekhai said. Over the past five years, Crello has reached 7 million users; VistaPrint, in turn, has over 20 million users worldwide.

This acquisition is one of the largest in the Ukrainian information technology (IT) industry, in the last few years, Nekhai said.

It confirms that Ukrainian companies can be interesting to Western businesses, while investment in local tech firms could eventually pay off. It also means that a new public U.S. company enters Ukraine, creating new jobs and attracting more attention to the country’s rapidly evolving IT sector.

“This is another sign for foreign businesses to cooperate with Ukraine,” Nekhai said.

Purchase details

VistaPrint has acquired 100% of Depositphotos’ shares and its projects — Crello, the photo studio Lightfield, an online magazine about photo art called Bird In Flight and online media WAS.

The founder of the company, Russia-born Dmytro Sergeev, had to quit his job, getting nearly $50 million from the acquisition deal, according to Forbes. Nekhai, in turn, will become a vice president of VistaCreate and Depositphotos. He will lead them under the supervision of Vista’s president of international business Florian Baumgartner.

Since 2009, Depositphotos has raised $8 million of investments. Sergeev controlled 56% of the company’s stakes. The rest belonged to managers, shareholders and investors, including TMT Investments, AVentures Capital and the European Bank for Reconstruction and Development.

After the acquisition, Depositphotos will continue working as a separate brand, employing nearly 450 people in six countries, including Ukraine. VistaPrint also plans to hire more Ukrainians in the following months, Nekhai said. 

For the company’s employees, this deal is great news as many of them owned stock options.

At first, Sergeev wanted to make his company public but said that he would agree to the acquisition if Depositphotos couldn’t grow fast enough by itself.

“Cimpress gives us the opportunity to compete equally in the global market with the best in the industry,” Sergeev said. “With venture capital investors, we would not have received such support so quickly.”

According to Sergeev, it was VistaPrint that reached Depositphotos to discuss the future deal. Almost all negotiations happened remotely and took several months. There was only one personal meeting when VistaPrint representatives from Europe and the U.S. came to Kyiv, Sergeev said.

Financial results

As of May 2021, Depositphotos has a library of 200 million images and 24 million customers in 192 countries. Forbes estimates the company’s revenue at up to $50 million.

According to Sergeev, Crello is now worth about $200 million. The startup makes money on monthly subscriptions, which offer unlimited downloads and several other premium options, in contrast to the basic plan.

VistaPrint has an annual revenue of over $1.4 billion. The company has 29 offices worldwide and employs over 6,000 people. Among its customers are 17 million small and medium-sized businesses.

For VistaPrint, this acquisition is a part of a bigger transformation strategy with a budget of $250 million. For example, its clients could use Ukrainian Crello to create Instagram posts, logos, gift cards, or presentations, and then turn to Vista to print them or put them on merchandise.

“We look forward to being part of the Vista team as we continue to innovate together to help small businesses look and feel professional both online and offline,” said Nekhai.