Enabling content creators, behind the Israeli app developer Lightricks’ valuation of US$1.8 billion

With the rise of a new generation of social media platforms represented by Instagram and Douyin, the self-media economy has entered a new era. Through advertising sharing, content creators have become a new profession, and can even become full-time jobs. Some content creators can earn a year’s income of traditional content creators just through a commercial cooperation or live broadcast. A large number of users upload their own works every day. This is largely due to the emergence of professional content production tools, which lowers the threshold for video editing and creation. Compared to making a PC version of a horizontal video, a lot of professional editing software is needed. The new generation of creators only need a mobile phone to complete the output of extremely creative works.

In the upstream of this industry, companies like Lightricks are the absolute winners behind the scenes. The name Lightricks is relatively unfamiliar to domestic users, but people who often “retouch pictures” should have heard of the Facetune 2 software. Lightricks from Israel is the developer of the APP, and its various products have repeatedly won many industry awards.

In fact, Lightricks has more than a dozen apps with different functions, spanning image processing and short video production. Each APP has a different functional orientation. You can use the Facetune series to beautify your personal selfies posted on Instagram, or you can use Videoleap’s powerful editing capabilities to create dynamic and cool vibrato short videos.

Lightricks, founded by a computer doctor in the field of digital image processing, has been committed to providing content creators with powerful but easy-to-use products since 2013. Up to now, the company’s products have been downloaded more than 547 million times, and the MAU is as high as 29 million, most of which are content creators.

Products such as Facetune and Videoleap once dominated the App Store image processing APP rankings. The birth of these popular apps provides users with feature-rich and easy-to-operate mobile authoring tools instead of relying on relatively complex desktop tools. The reason why Lightricks can become a “explosive factory” is that in addition to its deep accumulation in image processing technology, the grasp of product functions and ease of use is the key to victory.

Lightricks’ products have always been creation-oriented. For example, Videoleap is not a pure video editing tool, but a creative tool. Through rich native materials and creative plug-ins, users can create video works with richer graphics, change the single narrative style, and enhance the visibility of the content. This is particularly important for the increasingly competitive short video market.

Facetune is just the tip of the iceberg of Lightricks’ mobile creative product empire. The company subsequently launched the more powerful Facetune 2, and continued to advance the research and development of image and video processing, and expand the product lineup. In addition to the aforementioned Videoleap, Ligtricks also has applications for different content creators such as Photoeap, Beatleap, Lightleap, Artleap, Motionleap and Boosted.

Based on the “bakery financial model”, the Lightricks team was able to form a business closed loop, using the sales revenue of one piece of software to support the development of the next product. This profit model allows Lightricks to focus more on providing excellent creative tools for content creators.

Starting in 2015, Lightricks opened a round of financing and received a capital injection of 10 million U.S. dollars. In September 2021, in the context of the global economic downturn, the team bucked the trend and raised USD 130 million in Series D, raising a total of USD 335 million and reaching a valuation of USD 1.8 billion.

With the Facetune series as a beauty product for the masses and the Lightricks Creativity kit (including 4 Leaps) as a professional product, Lightricks has become a unicorn in the field of mobile image processing. Precise product positioning and functional design are the key to Lightricks’ success.

Enabling content creators, behind the Israeli app developer Lightricks’ valuation of US$1.8 billion

Compared to image apps that integrate many functions into one, Lightricks is more inclined to serve content creators. Therefore, creative editing, picture editing, dynamic effects, photo beautification, etc., are all undertaken by a single APP. This also makes Lightricks different from popular image software. That is, Lightricks is still a product focused on serving content creators, providing one-stop image processing services for the latter.

This positioning gives Lightricks a distinctive financial model. Of the 29 million MAUs, 5 million are paid subscribers. Focusing on specific groups allows Lightricks to have higher user stickiness and loyalty, which can create a stable cash flow and highly predictable income.

After the D round of financing, Lightricks will accelerate its expansion in the Chinese market. Currently, Lightricks is headquartered in Jerusalem, Israel, with offices in Shenzhen, China, London, and Haifa, Israel. And China is undoubtedly one of the countries with the largest number of content creators.

According to the “2020 Douyin Creators Ecological Report”, in 2020 alone, the Douyin platform has added 130 million creators, of which the youth group accounted for more than 60%. The “face value” video is the video type with the highest traffic on Douyin, which is undoubtedly the focus of Lightricks’ product operations.

After the D round of financing, Lightricks tried to achieve platform transformation through acquisitions and become a creator service platform focusing on content creation. For Lightricks, which wants to cultivate in the Chinese market, a large number of creators and high-frequency iteration of content trends are the prerequisites for its key value.

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