Shutterstock IPO Shows Power Of Marketplace Business Model

shutterstock revenue fcf

Photo: BI Intelligence

Shutterstock recently filed to raise up to $115 million in an IPO. The company has a healthy business, that has been profitable for years, with growing revenue and profits. Free cash flow in particular is healthy, totalling $36 million last year (see chart).¬†Shutterstock is a marketplace for stock photography. The strength of the marketplace business model is reflected in Shutterstock’s strong free cash flow: once you get past the chicken-and-egg problem to get enough buyers and sellers in one place, and once you cover your fixed costs, marginal revenue leads to profit.¬†

Shutterstock had 204 million cumulative paid downloads last year, has 35,000 contributors, 550,000 paying customers and 19 million images on its site, according to its filing. 

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