Year: 2019

Open source is a great source of free tools for developers, but as these projects proliferate, and some gain in popularity, the creators sometimes look for ways to monetize successful ones. The problem is that it’s hard to run a subscription-based, dual-license approach and most developers don’t even know where to start. Enter Israeli startup xs:code, which has created a platform to help developers solve this problem.

“xs:code is a monetization platform for open source projects. Unlike donation platform which are pretty popular today, xs:code allows open source developers to provide added value in exchange for payments. That comes on top of what they offer for free. This added value can be a different license, more features, support services or anything they can think of,” Netanel Mohoni, co-founder and CEO of xs:code told TechCrunch.

This does not mean the open source part of this goes away, only that the company is providing a platform for those developers who want to monetize their work, Mohoni said. “Companies pay for accessing the code, and they enjoy better software created by motivated developers who are now compensated for their work. Because our solution makes sure that the code remains open source, developers can continue accepting contributions so the community enjoys better code than ever before,” he explained.

Photo: xs:code

What’s more, project owners can even distribute funds earned from subscriptions to community contributors if they wish to do so, giving them a way to pay contributors, who help make the project better.

The way it generally works is that the open source developers create a dual license model. One has the raw open source code, and one is the commercial version, which could have additional functionality or support that customers would be willing to pay for via a subscription.

The developers create a private repository on GitHub, and connect to xs:code, where they can share a link to the paid version. Users hit the paywall and can subscribe. Xs:code collects the money and distributes it in whichever way the developers have indicated. The company takes 25 percent as a commission for maintaining the platform and collecting the revenue.

The platform is available for the first time starting today in Beta. You can sign up for free. Xs:code has raised $500,000 in pre-seed money to date.

Passport, a mobility management platform, just raised a $65 million Series D round from Rho Capital Partners, H.I.G. Growth Partners and ThornTree Capital Partners. This round brings its total funding to $125 million.

The plan is to use the funding to further invest in Passport’s mobility software platform and expand into digital parking payments.

In March, Passport partnered with Charlotte, N.C., Detroit, Mich. and Omaha, Neb. to create a framework to apply parking principles, data analysis and more to the plethora of shared micromobility services.

With Passport, cities can easily analyze scooter usage, parking patterns and curb utilization. Passport also enables cities to implement real-time curbside pricing and payments and better manage scooter placement. The idea is that cities and mobility providers will work better together if there are economic incentives in place.

Other than micromobility, Passport focuses on helping cities solve for issues with parking, enforcement and transit.

“In the future, almost everyone in the world will live in a city, so there’s no more important challenge to work on than how people move throughout communities and transact with cities,” Passport co-founder and CEO Bob Youakim said in a statement. “We envision a world where mobility is seamless. To bring this vision to life, we are creating an open ecosystem where any entity – a connected or autonomous vehicle, a mapping app, or a parking app – can leverage our transactional infrastructure to facilitate digital parking payments.”

Pear, a six-year-old, Palo Alto, Ca.-based seed-stage firm whose bets on nascent startups are closely watched by early stage investors, has closed on $160 million in capital commitments from a wide array of backers, including a previous investor, the University of Chicago.

It’s more than twice the $75 million that the firm raised for its second fund in 2016 and triple the $50 million it raised for its debut fund back in 2013. We gather the firm had to turn down quite a few interested parties, too, in order to stick to what it’s most comfortable doing, which is to make bets on very nascent startups.

A little less than half of these are launched by college students or recent grads, many of them at nearby Stanford but also at a growing number of other top universities, including UC Berkeley, Harvard and M.I.T. Pear also invests roughly 55 percent of its capital in founders who’ve logged some time in the working world, including at Uber, Facebook and Google.

We talked last week with the firm’s cofounders, Mar Hershenson and Pejman Mar, who’ve known one another for 20 years. Nozad famously sold rugs to tech millionaires before becoming a full-time investor; one early bet was on the early smartphone company Danger, which sold to Microsoft in 2008 for $500 million. Danger was cofounded by Hershenson, a three-time entrepreneur whose husband cofounded the company and Nozad was an investor. He’d also invested in Hershenson’s intellectual property startup Sabio Labs, which was later acquired by a now defunct software company called Magma Design Automation).

The pair said that little will change with this new, far bigger fund. The goal remains to be the “best partner on the ground for the entrepreneur from ground zero,” said Hershenson, meaning Pear doesn’t need to see revenue or even customers so much as to trust a team and its vision. Asked more specifically what it is that they look for, Nozad likened it to understanding “really good wine; it’s hard to explain it in words but once you have it, you know it.” Adds Hershenson, “We spend a lot of time with founders and a lot of it comes down to their commitment, how mission driven they are, and their ability to attract talent. You want a captain of the ship, someone who leaves last and who wants to build a product for many people.”

Certainly, the two have plenty of opportunities to meet founders, opportunities that they’ve created for the firm by focusing — to an extreme degree — on building community. In the last year, alone, Pear has hosted roughly 100 events, from a speaker series where it brings in investors and CEOs to speak to founders and students, to workshops, bootcamps, pitch nights, CEO dinners, hackathons and demo days. (Hershenson says one of her favorite evenings every quarter are dinners she has with other women engineers.)

Hershenson and Nozad are also building an organization to help scale their work — as well as hopefully outlast the two of them, they say — and which now includes three partners in addition to the two of them: Ajay Kamat, who focuses on consumer startups and previously founded the of Pear-funded startup Wedding Party, which he sold to Instacart; Ian Taylor, who heads up Pear’s “Dorm” programs and concentrates on supporting student founders; and Nils Bunger, who previously founded the desktop virtualization company Pano Logic before founding MobileSpan, a maker of enterprise file-sharing software that he sold to Dropbox. Bunger focuses, unsurprisingly, on helping Pear to uncover promising business-to-business startups.

The approach seems to be working. Among dozens of other startups, Pear was early to a number of big and growing companies, including the now publicly traded blood diagnostics company Guardant Health, the delivery company DoorDash, the HR and payroll software company Gusto, and Branch, a company that helps brands drive sales through its linking infrastructure.

Some of its newer bets seem interesting, too. Among these is Nightfall, a company whose tech scans structured and unstructured data in hundreds of apps for sensitive information that it then acts to secure, and which launched publicly last month with $20.3 million in funding. Another is ixLayer, a young San Francisco-based infrastructure startup promising to make it easier for its customers to offer home DNA tests by providing them all the services they need, from a custom storefront marketplace and patient portal, to EHR data access, and payment handling.

Indeed, like another six-year-old firm that we wrote about yesterday called SignalFire, Pear isn’t focused on themes so much as on founders, no matter where they might find them. As Nozad told us last week during our call, “We’re not a  research-driven fund, We think founders know better than us. We want to see future through their eyes.”

If you’re interested in learning more about Pear and its portfolio companies, the team interviewed roughly a dozen of their founders for the video below about how Pear has helped in their respective entrepreneurial journeys. Among those to sing the firm’s praises: Tony Xu of DoorDash and Shubham Goel and Ray Zhou of the relationship intelligence platform Affinity.

It wasn’t that long ago that digitally-native, vertically-integrated brands (DNVBs) were the talk of the startup world.

Venture capitalists and founders watched as Warby Parker, Casper, Glossier, Harry’s and Honest Company became the belles of the D2C ball, trotting their way towards unicorn valuations. Not long after, the “startup studio” was unmasked as the elusive unicorn breeding grounds (think Hims). Today, there’s yet another buzzword that’s all the rage and it goes by the name “D2C Holding Company.” And it’s not going away anytime soon.

What are DNVBs?

In 2017, DNVBs were a game-changer. Different than e-commerce, DNVBs sell products online directly to consumers and maintain control and transparency through each stage of the production and distribution process, all without the involvement of middlemen. This allows DNVBs to determine where and how their products are sold and to collect customer data that helps optimize their marketing strategies. 

DNVBs have exploded over the last decade, growing sales and venture capital funding at a rapid pace. These brands use digital engagement strategies to create stronger relationships with consumers, which — when implemented alongside captivating content — contribute heavily to brand success by increasing customer LTV and creating compounding unit economics.

The problem with DNVBs

In the last three years alone, more DNVBs have launched than in the entirety of the previous decade.

While this growth is encouraging, the problem is that these DNVBs are raising so much venture capital that in order to meet the return requirements of their investors, they need a significant purchase offer or IPO valuation. With more than 85 percent of acquisitions happening below $250 million in purchase price, strategic acquisitions offers that meet investor expectations are few and far between.

This ultimately creates a state of startup purgatory where DNVBs have no choice but to take a downround to find a lifeline — sorry, Honest Company — making it difficult to develop disciplined operational habits and achieve sustainable growth. With these challenges becoming more glaringly apparent in recent years, there came a need for a new approach to D2C at large. Enter the modern D2C holding company.

Make way for the D2C holding company model

Today’s version of the holding company model takes what companies like Procter & Gamble and Unilever did in the 1950s and modernizes it for the existing D2C market. Instead of taking a siloed approach, brands pool resources, operational costs and institutional knowledge to accelerate growth and achieve profitability at a faster rate. 

DNVB darlings Harry’s and Glossier are great examples of this. Harry’s diversification efforts have been centerstage as the company works to grow beyond men’s grooming to include personal care for men and women, household items and baby products. In May, Edgewell Personal Care, which owns brands like Schick, Banana Boat, and Wet Ones, acquired Harry’s for $1.37 billion. Glossier is also working to diversify its portfolio, with the launch of Glossier Play, a younger, more colorful sister brand to its original.

For DNVBs to successfully pivot to a holding company model, they will need to prioritize 1) diversification to satisfy customers’ short attention spans, 2) a data-first mindset to deliver the best possible customer experience, and 3) operational and capital efficiency to not only stay afloat, but thrive. 

An evolving landscape

The landscape for D2C holding companies is just starting to take shape, but here are some of the key players who have adopted this approach and are finding early success:

Walmart this morning announced a new pilot program that will test autonomous grocery delivery in the Houston market starting next year. The retailer is partnering with autonomous vehicle company Nuro, a robotics company that uses driverless technology to deliver goods to customers. Nuro’s vehicles in this case will delivery Walmart online grocery orders to a select group of customers who opt into the service in Houston.

The autonomous delivery service will involve R2, Nuro’s custom-built delivery vehicle that carries products only with no onboard drivers or passengers, as well as autonomous Toyota Priuses that deliver groceries.

The program’s goal is to learn more about how autonomous grocery delivery could work and how such a service can be improved to better serve Walmart’s shoppers.

Nuro’s focus to date has been developing a self-driving stack and combining it with a custom unmanned vehicle designed for last-mile delivery of local goods and services. The vehicle has two compartments that can fit up to six grocery bags each.

The company has raised more than $1 billion from partners, including SoftBank, Greylock Partners and Gaorong Capital. In March, the company announced it had raised $940 million in financing from Softbank Vision Fund.

Nuro is known for its pursuit of autonomous delivery. But it also licensed its self-driving vehicle technology to Ike, the autonomous trucking startup. Ike now has a copy of Nuro’s stack, which is worth billions, based on this latest round. Nuro also has a minority stake in Ike.

Nuro’s partnership with Walmart is hardly its first. The company partnered in 2018 with Kroger to pilot a delivery service in Arizona. The pilot, which initially used Toyota Prius vehicles, transitioned in December to the delivery bot. The autonomous vehicle called R1 is operating as a driverless service without a safety driver on board in the Phoenix suburb of Scottsdale.

The Nuro partnership isn’t Walmart’s first autonomous delivery pilot, either. The retailer earlier this year tapped the startup Udelv to test autonomous grocery deliveries in Arizona. This summer, it kicked off a test with Gatik A.I., an autonomous vehicle startup to test grocery delivery from Walmart’s main warehouse in Bentonville, Arkansas. Walmart also launched a pilot with self-driving company Waymo in 2018 to test rides to Walmart for grocery pickup, as well as a test with Ford and Postmates for autonomous grocery delivery.

“Our unparalleled size and scale has allowed us to steer grocery delivery to the front doors of millions of families – and design a roadmap for the future of the industry,” said Tom Ward, Walmart’s SVP of digital operations, in a statement. “Along the way, we’ve been test driving a number of different options for getting groceries from our stores to our customers’ front doors through self-driving technology. We believe this technology is a natural extension of our Grocery Pickup and Delivery service, and our goal of making every day a little easier for customers,” he aded.

Walmart’s Online Grocery business is booming, but today still relies on partnerships with third-party delivery services. Currently, Walmart partners with delivery providers across the U.S. to facilitate deliveries, including Point Pickup, Skipcart, AxleHire, Roadie, Postmates, and DoorDash. It has also tried, then ended, relationships with Deliv, Uber and Lyft in the past. By the end of 2019, Walmart Grocery will offer nearly 3,100 pickup locations and 1,600 stores that support grocery delivery.

The retailer’s investments in its online grocery business helped boost sales and benefitted consumers by offering an affordable competitor to Amazon, Target’s Shipt, Instacart, and others. In Q3, Walmart’s grocery business helped online sales grow 41%, ahead of the 35% gain expected, leading Walmart to another earnings beat and 21 quarters of growth in the U.S.

In the quarter, Walmart earnings rose to $1.16 a share on revenue of $127.99 billion. However, Walmart’s e-commerce business is losing money as it continues to invest in new technologies and acquisitions, which has led to internal tensions.

Walmart says its pilot program will Nuro will kick off in 2020.

A startup that’s built cross-channel growth marketing platform — used by businesses to capture customers across whatever digital media they happen to be using — is today announcing funding to do some growing of its own. Iterable — which uses email, push and in-app notifications, SMS and other sources to interact with users and deliver them targeted, personalised marketing messages — has closed another $60 million in funding, a Series D that it’s going to use to continue scaling its business into more markets (it’s recently expanded in Europe with a London office), and with more hiring.

“Another” is the key word for this round: Iterable had announced $50 million in funding just earlier this year, in March.

“This is about being prepared because of the uncertainty in the wider market,” said co-founder and CEO Justin Zhu said in an interview. “We are not sure what might happen next year.” The bigger trend in marketing tech is around consolidation and the building of “marketing clouds” by large players like Adobe and Salesforce, so it’s notable that Zhu said that while Iterable is continuing to grow — it has the startup’s focus will be on remaining independent and turning profitable. 

“It’s about getting to breakeven and then beyond that,” he said.

This latest round, a Series D, is being led by Viking Global Investors — the huge investment firm and hedge fund that has backed the likes of Facebook and security firm Druva, but also a range of biotech and pharma companies — with participation from previous investors CRV, Index Ventures, Blue Cloud Ventures, Harmony Partners, and Stereo Capital.

The company has now raised $140 million in total. Zhu described the valuation as a “very healthy increase,” and while he is not talking specific numbers, Iterable’s Series C came in at $275 million post-money, according to PitchBook, which makes this latest round definitely higher than $325 million. (We’ll keep trying to get a more specific number.)

A lot of marketing startups have their beginnings in the world of — no surprises here — marketing, which is to say that of the people who have had direct experience in dealing with the pain points of how legacy marketing products work, some of the more enterprising go on to found companies to try to solve those problems.

Iterable has a bit of a different origin story in that its founders come from technical backgrounds. Zhu co-founded Iterable with Andrew Boni six years ago, but before then, both of them cut their teeth as engineers, at Twitter and Google respectively (and they are both young: they started the company while in their twenties, and this is only Zhu’s second job out of university).

It was at Twitter that Zhu identified a gap between the amount of data that a company has on users, and how it’s not used as well as it could be to grow that company’s business, especially when that business is not already a tech company — and sometimes, even when it is: Twitter has yet to sign on as an Iterable customer, but Square, the other business led by Jack Dorsey, is.

“There are a lot of great ideas and things that became experiments at Twitter,” he said, “but I noticed that only a very few companies — the biggest, most qualified technology companies — could execute a variety of different growth marketing efforts. Many most likely don’t have the right people or experience.” As Zhu describes it, there are not that enough people building significant innovations in how marketing works, because they lack the technical chops to do so (they instead come from development and marketing backgrounds).

That challenge further has become a little more complicated in more recent times, for another reason, which is that we’re in a moment where it feels like marketing is the bad guy. The rise of stronger data protection and privacy rules, for example with GDPR in Europe, plus consumers’ wider awareness and subsequent have led to a collective rejection of too much tracking of their online activity.

The idea with Iterable — as its name implies — is that you’re given a platform to iterate, to try out lots of different approaches across a range of different platforms, leveraging data that you already have and can use, or that you are able to get from users as part of the campaign, to build out your relationships and engagement, to see what works and what definitely does not.

This can either be to bring in more eyeballs and visitors (in the case of a company that, say, offers ‘free’ services and makes money on advertising), or more straight sales by way of offering discounts, insights on offers for things you might want or other incentives to buy things.

The company’s customer list includes companies like Zillow, Priceline Care.com and Fender, which speaks to how it targets companies that span not those who are digitally native businesses (but not necessarily the newest of the pack), but also those that are legacy companies that need to figure out how to leverage digital channels better to continue connecting with more, newer, and younger audiences.

There are upwards of 7,000 companies in the wider space of marketing technology today, Zhu estimates, which speaks to just how much more activity we’re likely to see in this area: the big fish will eat the tastiest smaller fish, while other fish will not manage to grow and will disappear.

But equally, we’re also seeing an interesting evolution, where paths are emerging for the most promising of the lot to carve out independent places for their particular services, independent of the biggies (en route to becoming biggies themselves, perhaps). For example, the data warehousing startup Snowflake — covering one of the big components that martech efforts need to work — is now valued at around $4 billion and is showing no signs of slowing down.

That’s a path that Iterable wants to follow, too, with this round to help it get there.

We live in the world of ‘best of breed’ coming together, which for us is about partnering with the best analytics and data warehousing companies,” Zhu said. “There are many options today that don’t entail getting acquired by a bigger player.”

Unsplash has built up a library of 1 million stock photographs, all available to use for free. Now it’s ready to start making money — and to help its photographers earn additional income in the process.

Don’t worry: The company isn’t about to start charging for its photos, which CEO Mikael Cho said risks “stalling creativity.”

Nor is it going to slap banner ads on every page of its website. Yes, it’s unveiling a digital advertising business, but Unsplash is taking a specific approach — working with companies to create branded photos, which will then appear on desirable searches.

Square, for example, could upload photos of the Square Register, which will then show up when Unsplash users search for “cash register” and other terms.

Brands working with Unsplash will get prominent placement in relevant searches as well as their own brand channel, but Cho said the real impact only begins on the Unsplash website.

“This stuff doesn’t just live in a centralized place,” he told me. “More and more advertising platforms, it’s a walled garden. [With Unsplash], the purpose is to get it to spread: People use it in their presentations, it’ll end up on blog posts.”

With Square, for example, if someone’s writing an article about “the future of the cash register,” the Square Register suddenly becomes an obvious choice for the lead image.

“Square is known for its iconic ‘little white card reader,’ but our hardware has evolved into an ecosystem of products that helps business owners of all sizes,” said Square’s brand marketing manager Leann Livingston in a statement. “By featuring photography of Square hardware across restaurants, salons, and retail stores, we were able to expand our brand through organic imagery.”

Cho also said that in about half the campaigns so far, the brand is also commissioning Unsplash photographers to do the work. For example, Boxed Water commissioned photos of its product in some fun contexts.

“Through commissioning some of our favorite photographers, we’re setting a new norm of sustainability, allowing creatives everywhere to have access to images free from plastic bottles harming our planet,” said Boxed Water is Better CMO Rob Koenen in a statement.

Unsplash for Brands is currently invite-only. The company also says that research from Kantar Millward Brown has shown that its brand images can reach “mass scale” while outperforming TV and digital advertising benchmarks by up to five times.

As the world of digital payments continues to wait and see what kind of impact cryptocurrencies will have on the wider market (if any), consolidation continues apace among those that have built tools for today’s payment needs. Payoneer — a provider of cross-border payment services to millions of businesses in some 200 markets that’s valued at over $1 billion — is today announcing that it has acquired optile, a German startup whose platform lets businesses integrate different products offered by itself and third parties into a single payment experience.

Terms of the deal are not being disclosed, but Scott Galit, Payoneer’s CEO (seated, left, with Keren Levy, Payoneer COO and Daniel Smeds, founder and CEO of optile), noted in an interview that Payoneer itself is profitable and the deal was done without any outside, additional funding.

Payoneer reportedly engaged advisors this past summer to help it raise its next round of funding, something that Galit did not deny.

“I think it’s not impossible to raise more,” he said. “Acquisitions may be one way to accelerate our growth, so we might do this as we identify more opportunities.”

Optile is Payoneer’s second acquisition: the company acquired escrow-as-a-service provider Armor Payments in 2016, just ahead of raising its last round of $180 million from Technology Crossover Ventures and Susquehanna Growth Equity. (Incidentally, that precedent — first, an acquisition; then, funding — could be another indicator that another fundraising event is on the way.)

Payoneer today competes with the likes of PayPal, Adyen, Stripe, PayU, traditional banks and many others in providing an array of services to enable payments between businesses.

Payoneer may not a company that you hear a lot of buzz about, but its customers speak to the traction that it has quietly amassed across a wide swathe of markets: they include the likes of Facebook Amazon, Airbnb, Fiverr, Rakuten, and Google, and Payoneer is used to make it easier to pay money out to businesses, for businesses to pay in money for goods and services, and (in the case of marketplaces) provide cash advances to businesses in order to make purchases.

Optile will bring another layer of service to that existing stack: specifically, in the form of payments integration. Companies — say, like Airbnb — that sell not just their own products, but those of third party providers (airline tickets, or tours, for example) can use optile’s platform to integrate all of these into a single payments experience.

Similarly, the platform can also be used to integrate different payment methods into a single experience as well. Both of these are important for the customer experience in commerce, since one of the biggest challenges in online purchasing is shopping card abandonment, when people simply walk away from buying things because the process of doing so is too tedious.

Optile is not just bringing a new level of technology to Payoneer: it’s bringing talent. The company was founded and run by Daniel Smeds, who had already built up a strong track record in payments, first as the first director of technology at payments giant Wirecard, and then founding and selling another payments business, Pay.On, to ACI for $200 million. Smeds and his team of 75 will be joining the larger startup, where they will continue to operate as an independent group based out of their current HQ in Munich.

It’s not clear how much optile had raised in funding prior to this, but the deal underscores how consolidation is a game that both medium-sized and large companies will play to increase their real estate and customer touch points, but also that smaller companies will become involved in as an alternative to trying to scale their businesses on their own.

“In joining forces with Payoneer, we’re thrilled to have the opportunity to leverage their global infrastructure and team to continue building the world’s leading open payment orchestration platform,” said Smeds in a statement. “Payoneer shares our obsession with customer experience, meeting their needs today while preparing them for tomorrow, and are equally committed to bringing simplicity, flexibility and scale to today’s digital business.”

The next steps for the combined business are likely to see that scope expanding further.

“Cross-border payments is $50 trillion dollar market,” said Galit. “That’s a gigantic and broad space in practice.” He declined to say whether that could include expansions into areas like cryptocurrency, but noted when I asked about Calibra that Facebook is a valued client.

On the heels of a $50 million funding round in October, Wheels is launching its “smart” helmet system for its pedal-less e-bikes. The helmet, which locks into the rear fender of the bike, features sensors designed to know when a rider is using it.

In order to incentivize people to wear the helmets, Wheels will initially offer riders a 20% discount for unlocking and using the helmet for the duration of the ride.

Wheels, founded by Wag co-founders Josh and Jonathan Viner, aims to differentiate itself from the likes of other bike-share startups with its modular design, which includes swappable parts and batteries. Though, JUMP recently unveiled its vision for swappable batteries on bikes.The company says that results in a 4x longer product life cycle compared to other bikes on the market.

Wheels currently operates in six markets, including San Diego, Los Angeles, Atlanta, Chicago, Dallas, and Scottsdale, Ariz.

The photo-sharing app behind the 2019 meme craze “VSCO girls” has acquired Rylo, a video editing startup founded by the original developer of Instagram’s Hyperlapse.

A spokesperson for VSCO, an 8-year-old subscription-based business on track to surpass 4 million paying users, declined to disclose the terms of the deal. Rylo had raised roughly $38 million in venture capital funding, reaching a valuation of $120.25 million with a $20 million Series B announced in October 2018, according to data collected by PitchBook.

San Francisco-based Rylo was backed by a number of institutional investors, including Sequoia Capital, Alumni Ventures Group, Icon Ventures and Accel—a Silicon Valley venture capital fund and key stakeholder in Oakland-based VSCO.

Founded in 2015, Rylo is best known for its 360° camera capable of creating cinematic video in 5.8k resolution. The device previously retailed for nearly $500 but now sells for as low as $250 on BestBuy.com. Under VSCO’s ownership, Rylo will focus exclusively on building out its mobile video editing tools for mobile. The company tells us it will not continue to manufacture and sell its signature device but will continue to honor the warranty on previously sold cameras.

Rylo was launched by Alex Karpenko and Chris Cunningham. Karpenko, Rylo’s chief executive officer, previously founded Luma Camera in 2011, a video-capture, stabilization and sharing app acquired by Instagram in 2013. The deal marked Instagram’s first-ever acquisition; the app was subsequently shut down, with Karpenko joining Instagram’s team as a software engineer. Karpenko became key developer of Hyperlapse, Instagram’s time-lapse video app.

Cunningham, for his part, focused on iLife, Aperture and iPhoto for iOS as an engineer at Apple from 2008 to 2013. Cunningham eventually exited Apple for Facebook-owned Instagram, where he worked as an iOS engineer focused on Instagram Direct.

VSCO, led by co-founder and chief executive officer Joel Flory, charges users $19.99 per month for access to a full-suite of mobile photo-editing tools, exclusive photo filters, tutorials and more. In a recent interview with TechCrunch, Flory outlined ambitions to expand beyond photo-sharing and editing to video and illustration. The company’s latest deal, its first since its 2015 acquisitions of Moving Sciences and Artifact Uprising, confirms its intent to grow the business and carve out new revenue streams.

“We’ve seen video editing double on VSCO and DSCO, our GIF creation tool remains one of our most popular features,” Flory writes in a company blog post. “It’s clear that our users want more video tools and new ways to tell their stories through creative self-expression.”