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Matthieu Rouif
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Home  >  Companies  >  Photoroom
Photoroom is an AI-based image editing app and API for ecommerce.












Sacra estimates that Photoroom is at $65M of annual recurring revenue (ARR) as of March 2024, up 195% year-over-year.

As of December 2023, Photoroom had reached 100 million downloads of its apps and was at $50 million ARR, just three years after launch. The company had doubled its revenue in the preceding six months.

The company officially launched in February 2020, getting to 300K monthly active users (MAUs) and $1M ARR by August, growing 50% month-over-month, and $2M by the end of December 2020.



Photoroom is a mobile-first, AI-powered photo editing platform that offers a wide range of tools, including background removal, AI-generated backgrounds, retouching, blurring, AI-generated shadows, white backgrounds, custom text addition, background color changing, image outlining, and bulk resizing.

The company found product-market fit in early 2020 with vendors on platforms like eBay, Depop and Poshmark who need to optimize their product images for different online marketplaces and social media platforms—but who don't necessarily have the skills or money necessary for a platform like Photoshop.

Photoroom saw its growth spike 2020 after a shoutout from Gary Vaynerchuck and some prominent eBay influencers. COVID was a huge tailwind as offline retailers started to migrate online and looked for apps like Photoroom to help them optimize their images, and the Photoroom watermark that sellers saw everywhere helped distribute the product.

Business Model


Photoroom operates on a freemium model, offering a limited set of features and a cap on the number of images that can be processed for free. The company has various pricing tiers that vary by country, with the basic Pro tier on mobile priced at £3.99/week or £69.99 annually in the U.K and $4.99/week or $89.99 annually in the U.S. Photoroom also has separate rates for web users, Shopify customers, larger business users, and for its API.

The company has demonstrated impressive capital efficiency, scaling to $20M in ARR on just $2M of invested capital, and achieving profitability. The company's payback period is currently 1 month, which Photoroom credits to the willingness of their mobile customers to pay upfront.

Photoroom's growth accelerated after making a few tweaks to their generative AI model, including increasing their image generation speed by 100 times (from 3 minutes to 2 seconds), focusing on producing a quick first draft for iteration rather than a perfect image immediately, perfecting their image accuracy to ensure products always looked right, and removing the prompt generation.


Photoroom’s mission is based around the idea of making studio level photography accessible to any entrepreneur.

Canva is more around design on your desktop. It's also transitioning from a simple social media asset designer to nearly $1B ARR platform looking to displace the traditional productivity suite (email, word processor, spreadsheet) with the visual communication tools that have become essential for sales & marketing, product, HR and potentially everyone in an organization (slides, images, videos).

Adobe's Photoshop, on the other hand, is more for the 10s of millions of people who are professionals spending the day in front of their computer.

PhotoRoom is providing that service for people who are more in the grey area between prosumers and SMBs—people who can’t afford or don't know how to use Photoshop but need it for their business or side hustle.

TAM Expansion

The core customers of Photoroom today are SMBs, but they've gone upmarket via the PhotoRoom API. In May 2022, Warner Brothers marketed the Barbie movie using the PhotoRoom API to do a marketing campaign where people could create Barbie posters with their technology powering it on the back-end.

Meanwhile, the Wolt team used it to help the restaurants in their marketplace create studio-quality photography for their dishes and their spaces.

Other API customers of Photoroom include Netflix, Lionsgate, Zomato, Shopify, Audi, Hennessy, Thermos, Selency, Faire, and Zepto.

The upside for Photoroom is that they become the visual processing layer of every high-growth marketplace and high-volume content business that needs to optimize their content to drive higher conversion rates.


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