Evernote buys Aussie startup Skitch

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news Information collation service Evernote has acquired Australian startup Skitch, which publishes a popular Mac OS X image editing application and associated web service, for an amount which has not been disclosed.

Skitch — developed in Melbourne by a small team led by its chief executive officer Cris Pearson — has been one of the few imaging editing applications to gain any scale in a marketplace dominated by Adobe’s Creative Suite (including Photoshop) megalith. Skitch focuses on providing a much more limited set of features than Photoshop — but more aimed at the casual user who wants to do attractive image editing. The application and its associated web service is much-loved by the Apple user community in general.

In a blog post published yesterday, Pearson wrote that his company was “super proud” of the buyout. All of the existing Skitch.com services would continue for users, he noted, and “the Skitch name and soul will continue and grow bigger and bigger.

“The development of Skitch will now be able to broaden and flourish like never before,” he added, “with Evernote know-how and resources allowing Skitch to finally reach all those computers, tablets and phones out there. In short that means better experiences, and new stuff for you!”

As part of the deal, the full version of the Skitch application has immediately been made free for all users, and a version of the application has been released for Google’s Android mobile platform, with an Apple iOS version on the way.

In a post on its own blog, Evernote noted that it was drawn to Skitch for one reason: “We love and use their product with Evernote”. Evernote is a popular service which allows users to capture and tag all different types of content and store it in one centralised repository.

“For years, one of our most requested feature areas has been related to improved handling of images and annotation capabilities. Our users take and share millions of photos and screenshots already, but the experience isn’t as good as it could be. We debated about whether to add the improved functionality into Evernote or build a separate app to handle it. Finally, we decided to do both. Thanks to Skitch, we will,” the US-based company wrote.

“As Skitch users will attest, this is one of the most innovative, easy-to-use applications available on Mac. We’re going to keep it that way. We are committed, not only to making the Skitch Mac app more awesome, but also to bringing Skitch to every desktop and mobile platform under the sun. In addition, in the coming months, you’ll see tighter integration between Evernote and Skitch to let you easily draw, ink, grab screenshots, annotate and share your favorite memories.”

“Chief Skitchers, Cris Pearson and Keith Lang are moving from Australia and joining Evernote to lead a significantly expanded Skitch team focused on supercharging the product.”

The news comes just a month after Evernote revealed that it had secured a $50 million funding round led by US-based venture capital firm Sequoia Capital which would allow it to expand its operations (it currently has some 11 million users), as well as acquiring other companies.

“The fast pace of our organic growth, adding more than a million users in just the past month, shows that people really want to manage and simplify their lives,” said Phil Libin, CEO of Evernote. “And even though we’ve built a profitable and successful business in the past three years, we still have a long way to go to achieve our goal of becoming everyone’s second brain. Having this new investment, and Sequoia Capital as a full business partner, will allow us to improve and multiply our products in exciting ways.”

opinion/analysis
Regular readers of Delimiter will know that I always have mixed feelings when an innovative Australian company is bought out by a US giant, and the Skitch acquisition is no exception. Skitch is a great app which I use personally, and I’m really happy for the company’s founders in this acquisition.

Another liquidity event can only be good for Australia’s startup funding ecosystem as a whole, and I have no doubt that in a few years, once the dust has settled on the Skitch buyout, several members of the team will return to Australia and continue to work on new projects locally, as well as helping others with innovative ideas.

However, the history of Australian technology startups being bought out by US companies has shown the path to be fraught with danger. In the long term, it seems doubtful the Skitch brand name will continue to exist, as its featureset is integrated more tightly with Evernote. Will we eventually see Skitch become “Evernote Images” or something similar? History would suggest it is likely.

As an alternative to a buyout, I would have preferred to see the Skitch team take their commercial success on the application and leverage it to attract additional funding, to continue to build a stronger application development house on Australian shores. The sky’s the limit right now in terms of developing apps for the Mac OS X and iOS platforms, and I would have loved to see Skitch take their experiences with their flagship application (including the associated web service) into other verticals.

There is, after all, no shortage of funding splashing around right now for hot Australian technology companies — and with its globally known brand, Skitch was certainly that.

In short, when you see an Australian startup bought out by a US company, the experience is always bittersweet. You can’t help but applaud their success — but also think about what might have been.

Image credit: Evernote/Skitch

4 COMMENTS

  1. Great Work Skitch!

    I think the comment about them getting funding in Aus and continuing grow is easy to say that when your not in their shoes.

    Getting proper valuations and funding in Aus is almost impossible! Unfortunately Aussie startups are really left with no choice but to sell offshore where the valuation of their businesses are much better and much easier to do a deal.

    I’m sure any Aussie companies would love to keep it here… but right now it’s simple not possible.

    • “when you’re not in their shoes”

      *cough* … but I am in their shoes. Delimiter is an Australian startup like any other … it’s not like I’m not putting my money where my mouth is ;) Not to mention, have you seen the amount of investments in IT startups in Australia recently that have taken place? Domenic Carosa’s fund has made half a dozen over the past year along, to say nothing of a stack of others.

      There is more money floating around the Australian startup ecosystem right now than there has been since the dot com boom — and I am seeing startups pick up funding left, right and centre.

      • Hey Renai,

        Sorry maybe i didn’t explain it right.. i was saying that it’s very difficult for anyone else to judge their decision without actually being in their shoes… That is being in a startup or not…

        Every startup will go through different stages, different needs and reasons why they exit.

        Getting funding in Australia is still very difficult… Yes there is Domenic’s fund…. but it’s one of very few… When you compare that to the number of funds in the USA it’s no wonder Aussie talent is leaving Aus to go to the USA.

        My key point is also while you can get funding in Australia the valuations are generally no where near as good as you’ll get in the USA. Domenic’s fund generally will only invest up to $500k and take 30-40% shareholding in the company…

        In time i’m sure more fund will be available in Aus so we can keep the talent and the jobs in Aus… till then i think we’ll see more and more companies be bought by USA companies.

        Your running a great startup and offering real value to the IT community in Australia…. Maybe your the key to raising awareness to the investment community about missing out on opportunities like this ;)

      • Hey Renai,

        Sorry maybe i didn’t explain it right.. i was saying that it’s very difficult for anyone else to judge their decision without actually being in their shoes… That is being in a startup or not…

        Every startup will go through different stages, different needs and reasons why they exit.

        Getting funding in Australia is still very difficult… Yes there is Domenic’s fund…. but it’s one of very few… When you compare that to the number of funds in the USA it’s no wonder Aussie talent is leaving Aus to go to the USA.

        My key point is also while you can get funding in Australia the valuations are generally no where near as good as you’ll get in the USA. Domenic’s fund generally will only invest up to $500k and take 30-40% shareholding in the company…

        In time i’m sure more fund will be available in Aus so we can keep the talent and the jobs in Aus… till then i think we’ll see more and more companies be bought by USA companies.

        Your running a great startup and offering real value to the IT community in Australia…. Maybe your the key to raising awareness to the investment community about missing out on opportunities like this ;)

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