Indianapolis-based Pattern89 Inc., a High Alpha portfolio company that launched in 2017, has been acquired by New York City-based Shutterstock Inc. as part of a $35 million cash deal involving two other firms.
Publicly traded Shutterstock bought Pattern89 along with London-based DataSine Ltd. and Denver-based Shotzr Inc., the firms announced Tuesday. The companies will be part of a new artificial-intelligence subsidiary called Shutterstock.AI.
Pattern89, founded by R.J. Talyor and launched under the wing of Indianapolis-based venture studio High Alpha, uses artificial intelligence to help its customers get better results from their marketing campaigns. The company’s platform can, for instance, predict how different variations of an ad will perform, so a customer can get the best results without having to do real-world testing of various options.
As of June 2020, Pattern89 had 20 full-time employees. All employees will be offered jobs with Shutterstock when the acquisition closes, the firm said.
The terms of the Pattern89 acquisition were not disclosed.
“The Pattern89 team is thrilled to join forces with Shutterstock to build the future of creativity with AI,” Talyor said in an emailed comment to IBJ. “Over the past years, we’ve built the industry’s best platform for creative predictions and insights. This acquisition is a perfect fit, as our technology will help Shutterstock.AI’s customers discover their top-performing content and feel empowered to create with confidence.”
The company’s customers include retailers Lids, Finish Line, Fabletics and online eyewear company Readers.com; along with Indianapolis-based tech company Snapshyft and Indianapolis-based technology school Eleven Fifty Academy, among others.
Shutterstock, which was founded in 2008 and went public in 2012, offers licensed photos, illustrations, videos, music, and other creative content for use by brands, businesses and media companies. The company gets its content from contributors who earn licensing fees when Shutterstock customers download their work.
Shutterstock currently has more than 380 million images and more than 22 million video clips in its database, with hundreds of thousands of new images added each week.
“With these three acquisitions, Shutterstock.AI will help our customers globally solve the biggest creative challenge they have—discovering and selecting the right content that is relevant, and that resonates with audiences,” Shutterstock CEO Stan Pavlosky said in a media release. “We want our customers to create with confidence.”
Pattern89, which was formerly known as Quantifi Inc., has secured multiple rounds of outside funding since its launch.
Last year, the company raised $2 million in growth capital from an investor group that included Columbus, Ohio-based Break Trail Ventures, Indianapolis-based Elevate Ventures, Indianapolis-based High Alpha Capital, F&M Investments and Vitalize.
And in 2018, Pattern89 raised $3.5 million in growth capital from a group of investors led by F&M Investment Office LLC. That round of funding also included participation from High Alpha Capital, Break Trail Ventures, Elevate Ventures, IrishAngels and strategic angel investors, including Chris Baggott, the co-founder of ExactTarget and ClusterTruck.
In 2020, Shutterstock reported profits of $71.8 million on revenue of $666.7 million. As of Dec. 31, Shutterstock and its subsidiaries had 967 full-time employees, 64% of whom were based in North America, with another 29% based in Europe.