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Selling logos for e-sports teams and story templates for Instagrammers has helped one of Australia's most valuable technology scale-ups, Envato, grow its subscriber base by more than 150 per cent in 2018-19.
The Melbourne-based digital assets marketplace, which started out in 2006 selling only products related to Adobe Flash, grew revenue by 19 per cent to $166.4 million in 2018-19. It now offers everything from WordPress templates to 3D printing renders, with 95 per cent of customers outside Australia.
Collis and Cyan Ta'eed, the couple behind digital assets marketplace Envato.
Net profit was down slightly to $10.2 million from $US8.1 million in 2017-18 and $US17.6 million the year before, according to accounts lodged this week with the corporate regulator.
However, Collis Ta'eed, who co-founded Envato with wife Cyan in a Bondi garage, put the dip in profits down to a major pivot for the company over the past two years – from a marketplace making one-off sales to a subscription service which he likened to Disney+.
"You look at Disney's streaming offering, bundling in ESPN and Hulu, we want to be that for digital creators," he said.
The Envato Elements subscription service, which in Australia costs $29 a month for access to all the products hosted by Envato, saw its paid membership boom from 75,000 to 190,000 over the course of 2018-19.
However, that growth engine has needed some pump-priming with acquisitions.
In 2018, Envato bought a Mexico-based business, PlaceIt, which offers digital mock-up tools for amateur designers, and this year bought a Los Angeles-based stock photo library, Twenty20, which ironically counts Hulu among the subscribers to its 45 million photos.
"The subscription service brings us closer to customers who are in the mode of creating, and we've been making sure we offer all the tools they need," Mr Ta'eed said.
The acquisitions have seen a steady rise in employee expenses, as headcount rose from 410 to 550 throughout 2018-19, Mr Ta'eed said.
Advertising and marketing the Elements brand has also seen the marketing expenses line balloon, to $US16.8 million from $US11 million the previous year.
However, Mr Ta'eed said Envato could not have afforded to stay tied to one-off purchases, which are fading in favour of subscriptions across the e-commerce space.
"Subscriptions aren't the majority of our revenue just yet, but they will be soon and we expect them to make up the overwhelming majority of our revenue in future," he said.
Being close to the cutting edge of what's happening in the digital universe is vital for Envato to keep growing sales.
Mr Ta'eed said selling logos to e-sports teams had become an unexpected "hero" category for the business, in line with the boom in gaming competitions conducted via the live-streaming platform Twitch, as had templates used by Instagram influencers.
Print-on-demand was another fertile growth area, according to Mr Ta'eed, with Envato's marketplace seeing a huge spike in demand for digital mock-ups of customised T-shirts.
"We're essentially selling spades to the gold miners," he said.
Wholly owned by the Ta'eed family, Envato is worth more than $1 billion on some valuation measures. Collis and Cyan appeared on the 2019 Young Rich List, for wealthy Australians aged 40 and under, with a fortune estimated at $799 million.
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