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Picsart Business Model: How Picsart Makes Money

In recent years, the photo and video app category has experienced runaway success, driven by the rise in consumer fascination to edit photos and videos. Photo and video apps made nearly $2billion in 2019, up from $240 million in 2016 at a compound annual growth rate of more than 100 percent.

While Apps like YouTube & Tik Tok, and Twitch are a few winners anyone could guess, one app relatively lesser-known app that regularly features among the top 10 revenue makers in the photo and video app category is Picsart. In January 2020, Picsart stood fifth among the top revenue makers in its category, and the app is a regular feature among the top 25. 

What makes Picsart fascinating as a business case study is that it was bootstrapped in its initial years, and most of the growth has been organic, a difficult feat to pull off in the app space. 

In this blog, we will discuss the turn of events that led to Picsart’s founding, how it has grown over the years, and how its business model has evolved over the years. 

Picsart’s Founding & Growth Story

The usual startup story goes something like this. A college kid drops out to work on his idea. The product gets enough traction to convince venture capitalists to fund it. The company grows to become a unicorn. 

Picsart’s story, though, is different, except for the part that it too has become a unicorn. Hovhannes Avoyan, Picsart’s founder, was already a successful entrepreneur, having founded and sold five startups to Lycos, Bertelsmann, GFI, TeamViewer, and HelpSystems previously. 

The idea for Picsart came to him after Zara, his 11 eleven-year-old daughter, posted a drawing on social media and received harsh comments. The criticism shook her up so much she wanted to quit making art altogether. In an interview with Foundr, Avoyan explained how this incident led to the founding of Picsart, 

“So my response was to build a product which allows people like her to be creative and not only create on the go using the device which is always with you, but also be in a positive environment where you could talk with other creatives, people similar like you, you get encouragement, you get inspiration and you share with other people. It’s a community where you not only create, but also you share as you create and that’s an important part of the mission we are on.”

In January 2013, Picsart released its iOS apps. By November, Picsart had reached 90 million installs and had nearly 25 million monthly active users. 

By April 2015, Picsart had seen 250 million downloads for its iOS and Android apps, of which 60 million were monthly active users.

2017 was an eventful year for Picsart. In February, the company launched a new community-driven feature called remix Chat, a messaging system for users to share images directly or in groups and edit collectively with friends. In March, they launched a feature for the user community to create and share customer stickers. In July, Natalia Vodianova, Russian supermodel and philanthropist, collaborated with Picsart to help drive social engagement and activism within the Picsart photo community. By October, more than 100 million users were actively using Picsart monthly and it signed partnership agreements with major consumer brands and celebrities.

In 2019, Picsart achieved a major milestone — the company was ranked 4th among the top-grossing social photo and video editing apps after Instagram, Snapchat & YouTube by app analytics company Sensor Tower. 

By July 2020, Picsart had been downloaded more than 1 billion users. The company also made its first acquisition, a motion-based video effects company D’efekt in the same month. 

Picsart Business Model

Picsart makes money from two sources: in-app advertising and selling premium features under a paid subscription model. 

Initially, Picsart used to make money only by just showing advertising in the app, but it introduced Picsart Gold, its paid plan in 2018. 

Picsart’s free basic plan comes with standard photo and video editing tools. The Gold plan, priced at $4.66/month or $55.99 billed yearly, comes with premium editing tools and added benefits. Picsart also offers another paid plan, named Teams, targeted at organizations, priced at $6.24 per seat/month or $74.98 billed yearly.

Pricing for Figma's Free, Gold & Team plans
Source: Picsart

According to Forbes, Picsart has generated a revenue of $100 million in 2021 in the first seven months of the year. After its last round of $130 million funding, the company became a unicorn, valued at close to $1.5 billion. Since its founding in 2021, Picsart has raised a total of $195 million.

Thank you for taking the time to read the full case study. If you liked my piece on Inshorts, you might also like my article covering How Tesla Disrupted the Car Industry.

Picsart Business Model: How Picsart Makes Money
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Picsart Business Model: How Picsart Makes Money
Picsart makes money from two sources: in-app advertising and selling premium features under a paid subscription model.
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Muaaz Qadri
Muaaz Qadri
A Proud Computer Engineer turned Digital Marketer