May 15, 2020 - Economy & Business
Illustration: Aïda Amer/Axios
Facebook has agreed to buy Giphy, the popular platform of sharable animated images, Axios has learned from multiple sources. The total deal value is around $400 million.
Background: A source close to the situation says that the two companies first began talking prior to the pandemic, although that was more about a partnership than an acquisition.
- Giphy is expected to retain its own branding, with its primary integration to come via Facebook's Instagram platform.
- New York-based Giphy had raised around $150 million in VC funding since its 2013 inception, from firms like Betaworks (which incubated the company), Lerer Hippeau, IVP, DFJ Growth, GGV Capital, and Lightspeed Venture Partners. Its most recent private valuation was around $600 million.
- Yes, but: Facebook is facing enormous blowback over its previous acquisitions, which means that this deal, however small by comparison, is likely to face a lot of antitrust scrutiny by regulators. The tech giant is currently under investigation by federal and state lawmakers for antitrust.
The bottom line: Giphy is a massive video library, with hundreds of millions of daily users that share billions of GIFs, that generates revenue via branded content. Adding Facebook's ad sales and marketing firepower could be what transforms it from a popular service into a highly profitable one.
Update: Facebook just made it official on its company blog.
Source: Giphy