photoroom blur effect

Sources: Photoroom, the AI photo editing app, is raising $50M-$60M at a $500M-$600M valuation

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Image Credits: PhotoRoom (opens in a new window) under a license.

Apps that let users take, manipulate and share images have been some of the biggest hits in the world of mobile over the years. Now, the influx of AI is cracking open the market for a new wave of startups to step into the ring.

Photoroom — a startup out of Paris, France — has built a popular AI-based image editing app and API targeting e-commerce vendors, media specialists, and others. (It’s even been used to power a Barbie personalised poster site.) TechCrunch now understands that the startup is in the process of closing a round of funding.

Multiple sources say that the startup is raising between $50 million and $60 million on a pre-money valuation of between $500 million and $600 million. In a market where AI is hot, but funding overall remains very constrained (and some big-name VCs, such as Coatue, are actually now retreating), Photoroom has been turning heads — and getting people to open checkbooks, it seems.

It is unclear who the full investor list is. One source said that Balderton, which led the startup’s previous round, is leading this round, too. Others said that other previous backers were also participating along with new investors. “They are choosing between different term sheets,” one source said.

In addition to Balderton, existing backers include Adjacent, Kima Ventures, FJ Labs, Meta, Y Combinator (where it was a member of the Summer 2020 cohort, its first remote batch in the wake of Covid-19) and a number of angels such as Yann LeCun, Zehan Wang (formerly of Magic Pony and Twitter), execs from Hugging Face and Disney+, and many more. Photoroom will have raised $70-80 million all told if this round closes at these numbers.

Photoroom, and Matthieu Rouif, the CEO who co-founded Photoroom with CTO Eliot Andres, declined to comment on any funding-related questions. Balderton did not respond to requests for comment for this story. Others asked to remain unattributed.

Paris, where Photoroom is based, has shaped up to be a key city for AI development.

In addition to a wave of other smaller startups, Meta has a large AI lab there headed by Yann LeCun; Hugging Face, now based in NYC, got its start out of Paris; and Mistral AI, ambitiously building foundational Large Language Models that it wants to keep open source, is now valued at $2 billion.

Photoroom’s rise also follows other currents washing over the tech world at the moment, which transcend the current vogue around AI.

Over the years, the camera has become easily the most important feature on smartphones, arguably more significant than basic phone features themselves. Yet most of that trend’s riches have fallen to consumer apps and their ecosystems. Photoroom partly stands out for its primary positioning, at least for now, as a B2B tool.

Early on, Photoroom found traction with a long tail of small businesses, e-commerce vendors and resellers looking for photo editing software that was fast, easy to use and cost-effective, but still produced high quality results on individual images or batches of them: users can clip images out from backgrounds and then apply other effects, some of which can be prompted and generated by word commands. Customers use those images in online sales listings on platforms like Depop, eBay and Poshmark.

And by way of its API, Photoroom has also found an audience among a set of bigger customers. Warner Bros used the API to create a social marketing campaign for the Barbie movie this summer: fans were able to crop their own images and insert them into their own personalized Barbie posters. The tool and resulting posters were shared over 1 million times, Photoroom said.

In addition to Warner Brothers, Netflix and the online food delivery startup Wolt, among others, are using its tools for a wider set of use cases.

It also has built up credibility among its peers in the tech community.

Up to now, Photoroom has been building its platform based on its own vision models, trained on its own data — one way of making sure to have better control over those images and avoid copyright issues down the line. It uses tools like Dust to combine these with LLMs from third parties to build new functionality. Last year, for example, the company used GPT-4 to enhance its “instant backgrounds” feature with suggested scenes that could be generated with word prompts. The company is continuing to build, adding an enhanced shadow feature to its API just last week.

What’s also important (especially right now) is that, in addition to the expanding feature set, Photoroom’s B2B focus has helped it anchor its growth around a revenue-generating business model.

The product has a freemium tier in the form of a limited set of features can be used on a limited number of images for no cost. But there are also different pricing tiers that vary by country (in the U.K., the basic Pro tier on mobile is £3.99/week or £69.99 annually). There are also separate rates for web users, Shopify customers, larger business users, and for its API.

Adding all this together, since its last round in 2022, when it raised $19 million, Photoroom has been blowing up.

In the key market of the U.S., according to Data.ai figures, its iOS app is currently number-three among all graphics and design apps, and it’s been comfortably in the top 10 for the last three months, sometimes at number one. On Android currently it’s the number-one photography app in the U.S.

SimilarWeb pegs the number of monthly web visitors at just over 27 million as of December 2023, with figures rising over the three months prior by over 18%; but that’s just a small part of its base: nearly 90% of the app’s traffic and usage comes via mobile app.

The company told TechCrunch in December that in the three years since launch, it had reached more than 100 million downloads of its apps and was on track for ARR of $50 million.

But it’s not all smooth sailing. Photoroom is certainly not the only photo editing tool out there targeting businesses and growing: the dozens of competitors/alternatives range from Picsart, which has raised nearly $200 million, through to the much more modestly-proportioned Pixelcut, which has raised only $250k, according to PitchBook.

Nonetheless, rising tides lift boats. There has been a huge amount of buzz around generative AI among investors themselves looking for the next big hit.

In September last year, on the heels of the surge of interest in gen AI in the wake of ChatGPT, Andreessen Horowitz consumer partner Olivia Moore published some research running the numbers for popular generative AI apps.

The report ranked Photoroom as the sixth most-popular generative AI product. While ChatGPT was, unsurprisingly, far and away the most popular gen-AI product of all, the main takeaway was that the space was still very young. Most categories of apps, she wrote, are still up for grabs; and within the popular area of AI image-based tools, apps like Photoroom, in her opinion, have a shot at success.

“Products that are purpose-built for specific use cases or workflows are growing alongside more generalist tools, and showing signs that they can also become successful companies,” wrote Moore.

A spokesperson for Photoroom specifically pointed TC to the a16z research when contacted for comment, although she declined to say whether a16z is one of the investors in the company. We have contacted a16z to ask, too, and will update this story as we learn more.

Britain's Catherine, Princess of Wales chats with well-wishers after attending the Royal Family's traditional Christmas Day service at St Mary Magdalene Church on the Sandringham Estate in eastern England, on December 25, 2023. (Photo by Adrian DENNIS / AFP) (Photo by ADRIAN DENNIS/AFP via Getty Images)

Kate Middleton's photo editing controversy is an omen of what's to come

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Britain's Catherine, Princess of Wales chats with well-wishers after attending the Royal Family's traditional Christmas Day service at St Mary Magdalene Church on the Sandringham Estate in eastern England, on December 25, 2023. (Photo by Adrian DENNIS / AFP) (Photo by ADRIAN DENNIS/AFP via Getty Images)

Image Credits: Adrian Dennis/AFP / Getty Images

After frenzied speculation that a recent photo of Kate Middleton and her children was AI generated, the Duchess of Cambridge herself had to address the controversy.

“Like many amateur photographers, I do occasionally experiment with editing,” Middleton wrote in a statement. “I wanted to express my apologies for any confusion the family photograph we shared yesterday caused.”

There’s something odd about the photo — possibly that you have four people staring directly into your soul and smiling at you. But then there’s the hands. It’s an appropriate amount of hands — eight hands for four people — but they all look a bit off. We can see Kate’s hands, but her arms are hidden behind two children, and one hand looks slightly blurry, while the other is missing a wedding ring. Charlotte’s wrist looks like it’s blended with another missing wrist, and the sleeve of her cardigan blends into another gray cardigan that doesn’t seem to be in the photo. And Louis is just doing something weird with one of his hands that probably has more to do with kids being weird than it has to do with editing. But the longer you look at the photo, the creepier it gets.

To make things more suspicious, the Royal Family’s fans have been speculating about the princess’s recent absence from the public eye. The Royal Family announced in January that Middleton was having a planned abdominal surgery in London; after a few weeks in the hospital, she was discharged, and the family reported she was still recovering but doing well. But it’s been more than a month since Middleton has been home, and she still hasn’t made any public appearances — for a member of the Royal Family, that’s not normal.

As someone who had Instagram in high school, I get it. There’s a world of temptation out there, from VSCO to Facetune to Canva, and it’s so easy to just erase away an inconveniently placed zit … but you might get caught. Princesses: They’re just like us! This was a time when AI felt like science fiction, and you still had to use Photoshop to remove the background of an image. Back then, Royal commentators and fans probably would have pointed out the weirdness of the children’s fingers in the photo, or how there’s an area near Charlotte’s elbow that looks like something went wrong with a content-aware fill. But we wouldn’t have spun up a conspiracy that the entire image was a synthetic psyop created by Buckingham Palace.

Rumors about Middleton’s absence have sparked increasingly dubious explanations. Page Six reported an unfounded speculation that the princess got a Brazilian butt lift, while others joked that Middleton had something to do with that Willy Wonka pop-up gone wrong. One tweet even joked that Middleton might be Banksy. So when official Royal Family accounts published the suspicious-looking photo of Kate and her children, the internet had a field day. The discourse around the photo got so out of hand that the Associated Press pushed a “kill order,” meaning that it asked news outlets to take the picture down.

It’s not clear what tools the princess used to edit the photo — a tool like Facetune might be able to remove blemishes or toggle the brightness of the photo, but it won’t create a phantom sleeve beneath Charlotte’s elbow. Some retouching tools, like Photoshop’s content-aware fill or a clone brush, might use elements of the photo to create something that wasn’t originally there. But those aren’t the kinds of photo editing tools that people use when they’re trying to make themselves look Instagram-ready — it’s what you use when you’re trying to edit out a random guy in the background of your beach photo.

Even British celebrities like Piers Morgan have weighed in, raising the question of why the Royal Family won’t quash the conspiracy theories by just releasing the unedited photo.

As AI-powered image generation becomes mainstream, we’re losing our grip on reality. In a time when any image can be fake, how can we know what’s actually real? There are some tell-tale signs, like if someone has an abnormal number of fingers, or if someone is wearing an earring on one ear but not the other (though that could also be a style choice — you know it when you see it). But as AI gets better and more widespread, these methods of detection aren’t as reliable. A recent study from the Center for Countering Digital Hate revealed that deepfake images about elections have been rising by 130% per month on average on X (Twitter). Though speculation about a missing princess isn’t going to sway an election, this incident shows that people are finding it more and more challenging to distinguish between fact and fiction.

It’s a good thing that the public was so skeptical about Middleton’s sketchy photo, since she admitted that it was edited. Family photos are always awkward, but at least ours probably won’t spark international debate.

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Google I/O 2023 keynote presenting Google Magic Editor feature

Google brings AI-powered editing tools, like Magic Editor, to all Google Photos users for free

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Google I/O 2023 keynote presenting Google Magic Editor feature

Image Credits: Google I/O

Google Photos is getting an AI upgrade. On Wednesday, the tech giant announced that a handful of enhanced editing features previously limited to Pixel devices and paid subscribers — including its AI-powered Magic Editor — will now make their way to all Google Photos users for free. This expansion also includes Google’s Magic Eraser, which removes unwanted items from photos; Photo Unblur, which uses machine learning to sharpen blurry photos; Portrait Light, which lets you change the light source on photos after the fact, and others.

The editing tools have historically been a selling point for Google’s high-end devices, the Pixel phones, as well as a draw for Google’s cloud storage subscription product, Google One. But with the growing number of AI-powered editing tools flooding the market, Google has decided to make its set of AI photo editing features available to more people for free.

Image Credits: Google

There are some caveats to this expansion, however.

For starters, the tools will only start rolling out on May 15 and it will take weeks for them to make it to all Google Photos users.

In addition, there are some hardware device requirements to be able to use them. On ChromeOS, for instance, the device must be a Chromebook Plus with ChromeOS version 118+ or have at least 3GB RAM. On mobile, the device must run Android 8.0 or higher or iOS 15 or higher.

The company notes that Pixel tablets will now be supported, as well.

Magic Editor is the most notable feature of the group. Introduced last year with the launch of the Pixel 8 and Pixel 8 Pro, this editing tool uses generative AI to do more complicated photo edits — like filling in gaps in a photo, repositioning the subject and other edits to the foreground or background of a photo. With Magic Editor, you can change a gray sky to blue, remove people from the background of a photo, recenter the photo subject while filling in gaps, remove other clutter and more.

Previously, these kinds of edits would require Magic Eraser and other professional editing tools, like Photoshop, to get the same effect. And those edits would be more manual, not automated via AI.

Image Credits: Google

With the expansion, Magic Editor will come to all Pixel devices, while iOS and Android users (whose phones meet the requirements) will get 10 Magic Editor saves per month. To go beyond that, they’ll still need to buy a Premium Google One plan — meaning 2TB of storage and above.

The other tools will be available to all Google Photos users, no Google One subscription is required. The full set of features that will become available includes Magic Eraser, Photo Unblur, Sky suggestions, Color pop, HDR effect for photos and videos, Portrait Blur, Portrait Light (plus the add light/balance light features in the tool), Cinematic Photos, Styles in the Collage Editor and Video Effects.

Other features like the AI-powered Best Take — which merges similar photos to create a single best shot where everyone is smiling — will continue to be available only to Pixel 8 and 8 Pro.