136 INDEX STOCK GETS $18.6 MILLION
April 20, 1998
Index Stock Photography announced in March that SCP Private Equity Partners, L.P. had
provided them with $18.6 million in venture capital to fuel an
aggressive growth of their web business and a drive to acquire additional collections.
According to Index's CEO Bahar Gidwani, the capital infusion will unleash a drive to expand
both its traditional stock photography business and its
rapidly-growing web-based image commerce. "To date, our growth has been driven by the
success of our TeleFocus image browser used by traditional photo
customers, as well as our web-based Photos To Go (www.photostogo.com) business. Now, we can
accelerate our growth and expand our market through
affiliations with partners as well as carefully selected acquisitions."
Index is one of the first stock photography services to distribute electronic photographic
images directly to consumers via on-line services. Revenues
for Photos To Go have increased by more than 30 percent per month since its launch last year,
driven by growing demand among small and home-based
business customers, innovative pricing, and affiliations with software companies, web search
engines, and content providers. Photos To Go currently
has affiliations with Borderbund, Earthlink, Ask Jeeves, and many others.
Gidwani says that 31 stock agencies have partnered with Index as a way of marketing their
images on-line without the huge cost of developing their own
distribution system. Many of these agencies are at the "test market" stage and have only
put a few thousand images on-line as they determine the type
of imagery that sells best using the Index system.
Index would not provide Selling Stock with the names of any of these "partners." It would
seem that some of the most likely partners would have been
those agencies, formerly with Kodak Picture Exchange, that had many images scanned and
keyworded when KPX went out of business. However, when we
checked with many of these agencies we were unable to find any that had decided to join
Index's marketing venture. We suspect that the agencies that
have joined Index in the use of their TeleFocus system are all very small players in the
In addition to partnering, Index intends to continue its acquistion strategy, started in
1991. They hope to acquire up to six additional agencies in
the next twelve months. Previous acquisitions were Telephoto, Profiles West and Southern
Stock. Their goal is to greatly expand the breath and depth
of the material they have available for their clients.
We did an extensive review of Index Stock in the September 1997 (Story number 103 in the
online archives). At that time we estimated that their gross
income in 1997 would be $3.8 million dollars.
"We have been extremely impressed by the Index Stock Photography management team, its
commercial success to date, and its growth potential and
strategy," commented Samuel Plum, a managing general partner of SCP. Mr. Plum is one of
three SCP executives who will join the Index Stock Board of
Directors, bringing the total number of Directors to eight.
SCP Private Equity Partners, L.P. is an equity and equity-related investment fund formed by
Safeguard Scientifics, Inc., Winston J. Churchill and
Samuel A. Plum to make private equity investments in post-venture stage companies covering a
broad range of industries. The fund has $265 million
Safeguard Scientifics had revenues of $1.985 billion in 1997 and is engaged primarily in the
business of identifying, acquiring interests in and
developing partnership companies, most of which are engaged in information technology
SFE seeks companies capable of being market leaders in segments of the information technology
industry and which are at the stage of development that
would benefit from Safeguard's management support, financing and market knowledge.
During 1996 CompuCom, a provider of distributed desktop computer products and network
integration services, accounted for 97% of SFE's net sales. At
that time SFE owned 50% of CompuCom.