It made a giant noise as it caught everyone by surprise — $230 million investment in a company providing photo services. After Adobe’s $800 million purchase of French microstock photo company Fotolia, Pond 5’s $64 million investment and Shutterstock’s $76.5 million IPO, it is the highest figures ever seen invested in the photo world, by far. Sure, Facebook bought Instagram for $1 billion but that was for its formidable dedicated audience, not for its inexistent business model.
In the case of Meero, it’s obviously for the business model. So what is it with Meero that triggered such an investment?
Meero is a two-sided marketplace.
On one side, companies who need pictures made. One the other, freelancing photographers who need money. Meero, as a platform, arranges for them to meet, handles the transaction, and gets a cut. Reminds you of something? Yes, Uber, AirBnB, Fiverr, eBay, and other companies classified under the Gig economy work the same way. The most hyped are those, like Meero, who actually do not own or create anything but are the technological equivalent of a middle man. No significant capital investment and minimum employee count grants them the agility to scale rapidly with minimum cost — just a platform where buyers and sellers meet.
At last count, there are about 36 companies worldwide who offer the same type of services as Meero. Some are specialized in engagement or wedding photos. Others will meet you during your vacation and offer better-than-selfies Kodak moments. Some are older like Perfocal in the UK ( 2015) or Ooshot (2013) in France. Some have famous investors like Australian Snappr and Google Maps co-founder Lars Rasmussen. Some have a prestigious pedigree like Kodakit from yes, the company created by George. All have the exact same model, a platform for matching buyers of photo services with freelance photographers.
You still didn’t answer the question: So why Meero?
Meero’s official self-declared moat is a proprietary AI-powered editing software that can skim through thousands of images and select the best pictures in seconds. Except its not much of a defensive ditch. Anyone can train a categorizer to do the same using companies like Clarifai or Imagga. Camera app EyeEm even has side hustle business with a ready to go API that can be consumed by any application. No need to hire and maintain expensive AI engineers.
Meero claims 31,000 clients in 100 countries, which is, in just three years, an impressive growth. The gamble taken by the series C investor is a bet the on-demand photography market being a “winner takes all.” With $230 million in its war chest, Meero has plenty of cash to quickly open offices worldwide, rapidly expand market shares, and make acquisitions. Once big enough, the competition will die off by market asphyxiation. This series C becomes the competitive moat as it is improbable any other companies will receive such a cash inflow. While there are no public studies ( Meero’s CEO claims it’s $100 billion a year), the market for on-demand, non-stock photography is only poised to grow. More and more companies need a set of images to fulfill their basic marketing needs ( Google Maps, Yelp, Linkedin, Facebook, Instagram, Pinterest, Travel sites, etc..). And there is certainly no limits to how many people are ready to take pictures in exchange for money.
But if anything, companies like Uber have shown that this strategy can be costly and not always successful. As well, too much investment money can be as destructive as not enough.
Also, established professional photographers do not see with a kind eye this intrusion of cheap, sub qualified labor in their marketplace. It devalues their trade and undercuts their pricing. Many have raised strong concerns regarding their livelihood. In European countries, where markets a more regulated, some have started to petition their government to protect their trade.
The great unknown is if the great stock photo companies are going to react. Getty Images and Shutterstock already handle on-demand photography for enterprise clients, mostly by covering events. Both gather a substantial part of their revenue via this activity, and Shutterstock even purchased the on-demand startup Flashstock for $65 million two years ago. While they will both certainly aggressively protect their turf as it also provides them with valuable content to license, they might decide that the Meero model is too distracting to their licensing core business. If they did, however, they could become formidable players with decades of proven experience, strong relationships, and unbeatable distribution channels.
Author: Paul Melcher
Paul Melcher is the founder of Kaptur and Managing Director of Melcher System, a consultancy for visual technology firms. He is an entrepreneur, advisor, and consultant with a rich background in visual tech, content licensing, business strategy, and technology with more than 20 years experience in developing world-renowned photo-based companies with already two successful exits.