While Digital Railroad announced in February to have closed another funding round of $10 million (officially the second round), Red Herring reports today that "PhotoShelter Snaps Up $4.2M" (officially the first round):
PhotoShelter has quietly secured an investment that will help it join a growing army of Internet startups taking aim at the $2.5 billion professional photo marketplace dominated by groups such as Corbis and Getty Images.
The photo service’s company’s parent, BitShelter ["PhotoShelter is our first product"], has picked up $4.2 million in first round funding from General Catalyst Partners. BitShelter hasn’t announced the funding, but it was confirmed by a source familiar with the matter. The deal means yet another startup is coming out swinging at the giants of the professional photo market.
“There is a thought that the Gettys can be overrun by the much smaller players,” Jupiter Research analyst Peter Sargent said.
More here in a typical Red Herring article.
The more interesting question however is why "only" $4.2 million? Have they been more successful in terms of revenues in the past and don´t need so much venture capital or do they just not want to give away so much equity? Are PhotoShelter´s aims more national, less international, which requires less venture capital? Finally, will they be more successful with this strategy?