Stockholm-based EQT Growth fund has entered into an agreement to acquire a majority stake of GotPhoto Co. from its founders, existing angel investors, and management team, who will remain minority owners. GotPhoto's management team, including its CEO, Benedikt Greifenhofer, will continue to lead the company, building on its strong track record of growth, the announcement stated. As part of the transaction, EQT Growth will also invest additional primary capital into the business to further accelerate the company's organic growth, including product and tech investments, as well as capitalize on attractive inorganic opportunities in the market.
Founded in 2012 and headquartered in Berlin, Germany, GotPhoto (and its German brand, fotograf.de) enables photographers to digitize key parts of their workflow, including photo management, photo editing, marketing automation, payment, and order fulfillment. GotPhoto powers the daily operations of photographers, allowing them to save significant time and effort across photo shoots, the announcement stated. The company has more than 4,000 customers, who are primarily SMBs and "solopreneur" photographers, across the United States, United Kingdom, and DACH and has managed to build a strong reputation as a leading vertical software solution within the people photography segment across its core markets while being bootstrapped.
GotPhoto operates in a large but highly fragmented and antiquated market, in which digital services and products are not commonly used, the announcement said. "As customers increasingly recognize the benefits of digital-native workflow management solutions like GotPhoto's, it is expected that the underlying core market will grow 24% year-on-year through to 2027. Added to that, historically the volume photography market has proven to be more resilient than other parts of the wider photography market given people's continued desire to purchase high-quality photos as a way to 'capture a moment' in time, like the first day of nursery or graduation day," the press release stated. GotPhoto has seen consistent 50% year-over-year growth over the last five years.
EQT Growth will partner with GotPhoto's founders and management team to further invest in the company's proprietary tech platform while it adds new product features. At the same time, as GotPhoto continues to build its commercial expertise it will benefit from access to EQT's in-house digital team, EQT's network of over 600 expert industrial advisors, and shared learnings across EQT's global business, which is active in the company's core markets across in Europe and North America. With this support, GotPhoto plans to further expand its presence in areas such as sports and portrait photography as well as new attractive geographies, as it aims to strengthen its position as a leading global player in people photography. In addition to that, both EQT and GotPhoto believe there are a number of interesting M&A opportunities in the market.
"I'm very proud of everything that our team here at GotPhoto has achieved so far but, in many ways, this is just the beginning," said Benedikt Greifenhofer, CEO of GotPhoto. "Partnering with EQT Growth marks the beginning of an exciting new chapter for GotPhoto. It will enable us to accelerate our mission of driving the digitization of the people photography market and allowing photographers to do what they do best: taking photos. We look forward to leveraging EQT's digital expertise and sector experience, combined with their local presence across Europe, the US, and Asia and their broad network of industrial advisors, to successfully take this next step on our journey."
GotPhoto co-founder and former CEO Markus Posselt will transition to GotPhoto's Advisory Board.
"I'm very happy that with EQT Growth we have found an ideal partner for GotPhoto's next stage of growth," said Posselt. "Not only was EQT our preferred partner of choice given their global scale, strong value-add capabilities, and sub-sector expertise across software and prosumer technology investments, but also given the great cultural fit with the EQT team and their alignment of vision and values with ours."
"GotPhoto is a prime example of a technology company supported by long-term macro trends and led by an excellent management team that is ready to embark on the next phase of its growth journey," said Dominik Stein, Partner in the EQT Growth Investment Advisory Team who will also join GotPhoto's Advisory Board. "Benedikt and the entire GotPhoto team have accomplished so much, having to-date been entirely bootstrapped, and we are delighted to partner with them as we continue to build on GotPhoto's market-leading position in the US, UK, and DACH."
The transaction is subject to customary conditions and approvals and is expected to close in April 2023.