Pinterest said to be in talks to acquire photo editing app VSCO

Pinterest has held talks to buy VSCO, a photography app that spawned a teenage social media craze, according to two people with knowledge of the matter.

The discussions are ongoing, said the people, who declined to be identified because they were not authorized to speak publicly. A deal price couldn’t be learned; Pinterest has a market capitalization of about $49 billion, while VSCO has raised $90 million in funding and was last valued at $550 million. An acquisition may not materialize, the people cautioned.

Representatives from Pinterest and VSCO (pronounced “VIS-coh”) declined to comment on deal talks.

Julie Inouye, a spokesperson for VSCO, said the company was focused on expanding its business. “We’re always meeting with different companies across the creative space at any given time and do not discuss rumors or speculation,” she said.

Pinterest and VSCO, which stands for Visual Supply Company, are part of a group of tech companies that are highly focused on digital images and visual editing and that rely less on social networking features. Pinterest, a digital pinboard site that went public in 2019, lets its users discover and save images to inspire creative projects or to plan important aspects of their lives, including home renovations, weddings and meals.

VSCO, a 10-year-old startup, makes an app for the editing and sharing of images and videos. In 2019, it became popular with a Gen Z group that came to be known as “VSCO girls,” who were known for wearing Crocs and carrying Hydro Flasks. The idea of VSCO girls went viral, inspiring social media imitation, mockery, memes and Halloween costumes.

For Pinterest, buying a once-buzzy startup that was popular with younger audiences and that has expertise in photo- and video-editing technologies could bolster its core service, the people said.

Since Pinterest went public, its revenue has grown, although analysts have said they don’t expect Pinterest to become regularly profitable until 2022. It has also expanded internationally.

During the pandemic, the company experienced a surge of interest as people were locked down and turned to more digital activities. Pinterest added 100 million monthly active users last year and now has a total of 450 million monthly active users.

The San Francisco company also faced social unrest last year. In December, it agreed to pay $22.5 million to settle a gender discrimination and retaliation lawsuit from its former chief operating officer, one of the largest publicly announced individual settlements for gender discrimination. Two female employees of color who quit last year also publicly discussed their experiences with racist and sexist comments, pay inequities and retaliation at the company.

Founded in 2011, VSCO became known among younger users as a kind of anti-social network. The app does not have likes, comments or follower counts, so it appeared to put less pressure on users to build up a fan base. VSCO also eschews advertising, instead earning money by charging people for extra features. Of its 100 million registered users, more than 2 million are paying subscribers.

When VSCO girls became a cultural phenomenon in late 2019, investor interest in the startup swelled. But the fad has since cooled off. When the pandemic hit, VSCO laid off 30% of its employees. In December, it acquired Trash, a mobile app for video editing, and said it planned to continue acquiring companies in 2021.