Social media group Facebook purchased Giphy, a US-based searchable GIF repository backed by internet and technology conglomerate Alphabet and talent agency Creative Artists Agency (CAA), on Friday.
The two companies did not confirm the size of the transaction but Axios reported the deal was sized at approximately $400m, a reduction from the reported $600m valuation at which Giphy raised $72m in an October 2016 series D round that represented its most recent funding.
Founded in 2013, Giphy operates an online portal that lets users create, search for and share animated GIFs: short, looped video clips often consisting of scenes from television series and films that are typically used in online memes.
The platform has been integrated with third-party offerings such as Facebook’s Instagram, Messenger and WhatsApp services, allowing users to post GIFs without leaving the app.
Giphy is also used by other services, such as social media platform Twitter and consumer electronics producer Apple’s messaging tool, iMessage. Facebook has said it will continue to provide access to other developers and allow users to upload their own content.
The company will become part of Instagram, the image-sharing app subsidiary of Facebook which the latter claims has 1 billion monthly active users. It will continue to develop its technology and deepen its relationships with partners post-acquisition.
Facebook had previously tried to acquire Giphy in 2015, but the company declined that offer. It had raised a total of $150m, with DFJ leading the 2016 round, investing alongside Alphabet unit GV, China Media Capital, RRE Ventures, IVP, Lightspeed Venture Partners and Betaworks.
Lightspeed Venture Partners led a $55m series C round for the company in February 2016 that included CAA’s corporate venturing arm, CAA Ventures, as well as General Catalyst, RRE Ventures, Betaworks and Lerer Hippeau.
The series C investors had participated in Giphy’s $21.5m series B round the previous year, after CAA Ventures, Lerer Hippeau, RRE Ventures and existing investor Betaworks supplied $2.4m in series A funding in 2014.
