Breakout Startups- Bonus Free Edition

Mar 22, 2020

Hi everyone,

This is our second free edition this week and today, we are making one of our private memos public. Things have been hectic here in India and we have already entered stage III. I hope y’all are fine and staying inside.

Coming back to the newsletter, I have been working on starting a dedicated community channel on Slack/Discord as a place to gather builders, managers & investors in one place to discover cool things.

If you have got anything interesting ideas, feel free to shoot me a reply or by just tweet out to me at @ankitkr0.

Watch out for an invite next week😀

Today we are talking about, Kapwing, the company building Adobe for the Meme Generation.

About

Kapwing is a collaborative platform for creating images, videos, and GIFs.

The platform enables people to make and share their stories on the internet. The free online multimedia editing suite includes the a meme maker, subtitler, trimmer, looper, filters, and more. Anyone can make stop motions, share highlights, or resize a post for your Instagram Story.

The team says,

It’s free and always will be.

For the revenue, the company also offers a Premium Version, where it helps its Pro subscribers with permanent hosting, saving throughout the creation process and re-editing after export. It also plans to sell enterprise licenses to let whole companies use the product.

Currently, the company offers a variety of tools ranging from Watermark Video/GIF to Meme Generator and what not.

See all the tools here 👇

Tools made by Kapwing
Creativity is easy with Kapwing's suite of image and video editing tools. Learn more about our products, such as the…www.kapwing.com

Revenue

According to Crunchbase, the company has $1M in estimated revenue annually.

Traction

Before Kapwing, Julia and Eric started Hot Barber, a website that let hair stylists set up profiles and customers browse portfolios, but the founders couldn’t find a way to monetize it.

After this, the company bumped into Kapwing and put up a landing page to collect email addresses while they built the first version of the product. They collected a few hundred emails in the first 2 weeks, which led them to believe there is something here.

The team quickly put together an MVP and shipped it quickly; it took the duo about three weeks to launch the web app after writing the first line of code.

After this, they reached out to dozens of journalists and bloggers to see if they would write about them, and one did. The first month of usage provided the fuel to keep them going.

Soon after this, they started charging for the product.

In the middle of the way, the company tried many ways to generate buzz about the product. They even tried chalking the sidewalks in high-foot traffic areas of San Francisco as a PR Stunt.

You can read more about their “Virality” attempts here. This is a fun read 😄

Press Stunts: The scrappy way to grow to a $20K MRR business · Kapwing Blog
My co-founder and I have grown a $20,000+ MRR business in a year with trivial (<$1000) marketing spend. We're…www.kapwing.com

However, soon after this, the company unlocked paid users and steadily grew to $9K/Month revenue by June 2018 while growing 30% MoM.

In the same month, the company announced its Seed Round led by Kleiner Perkins and also put out an interesting stat.

More than 100,000 people use Kapwing every month, publishing more than 4000 videos daily.

Cut to September 2019, the company announced that it had grown 10x to 1 Million Users and raised another round of funding led by CRV.

Meme editor Kapwing grows 10X, raises $11M
Kapwing is a laymen's Adobe Creative Suite built for what people actually do on the internet: make memes and remix…techcrunch.com

The company currently has high profile companies such as Airbnb, Pinterest, Google, Salesforce as its users and is growing rapidly 🚀

Funding

The company started off as a bootstrapped startup for the first 6 months but quickly raised its Seed Round after that.

Kapwing has raised a total of $12.7M in funding over 2 rounds.
Most recently, the company raised an $11M Series A led by CRV along with follow-on investments from Village Global, Sinai and Shasta Ventures.
Prior to this, the company had raised a Seed Round of $1.7M from Kleiner Perkins.

Team

Enthoven and Eric both worked at Google Image Search in the popular Associate Product Manager (APM) program that’s minted many star founders so far.

Julia Enthoven- Co-Founder & CEO, Kapwing. Previously at Google.

Eric Lu- Co-Founder & CTO, Kapwing. Previously at Google.

Market Landscape

We are in the gold rush of Memes and Kapwing is building the ultimate “Picks & Shovel” business in this rush. In the Series A announcement, Jane VC wrote,

We’re bullish on Kapwing for many reasons. It fuels the explosive growth in video communication, as well as the democratization of design and content. With Kapwing, anyone from enterprise teams, to someone with a side hustle, to the budding creator can make and share high quality video content. Since their launch in October 2017, Kapwing users have made more than nine million images, videos and GIFs on the platform.

In the past decade, we have seen brands use video an important means of communication channel for businesses. More than 90% of marketing teams now use online video across social media channels & YouTube which serves an interesting opportunity for a player like Kapwing.

The unique proposition for Kapwing is its 0-Learning Curve for new users. Anyone can come in and get started with editing videos and making memes on the platform within a few minutes. The creators don’t need to install any software or learn to use a complex software program.

One of the most interesting things Kapwing has done is to keep a large amount of its product free to use.

Here’s how it’s helping them right now👇

Kapwing after some videos and images created with Kapwing were shared by celebrities including Kanye West, Jennifer Lopez, and Joe Jonas on social media.
PewdiePie, the most popular YouTuber in the world, frequently reviews memes with a Kapwing watermark on his channel. In July 2018, Viacom ran two ads with Kapwing watermarks in the corner.

The Kapwing watermark reminds of how apps like TikTok, Dubsmash grew in early with video watermarked with their logo being shared on Social Media.

Competitors

Kapwing has a set of Direct & Non-Direct Competitors. Its non-direct competitors include tools like Imgflip, ILoveIMG, Imgur’s on-site tool, and more robust apps likeCanva.

Direct Competitors 👇

Animoto- A web and mobile application that enables users to create professional videos on a computer and mobile device. Raised $20M so far.

WeVideo- A cloud-based video editing platform for web and mobile. Raised $5M so far.

Magisto- A web and mobile-based application that allows users to create, edit, host and monetize short-form videos. Raised $4.6M so far.

However, one key aspect where these companies are different from our breakout company is that no company positions itself as Canva for Video plus its affiliation with Meme Community, Kapwing is in an entirely different league.