Canon Buys U.K. Photo Startup in Bid for Smartphone Relevance

(Bloomberg) -- Canon Inc., the Japanese consumer electronics firm, is buying U.K. startup Kite, a company that helps people order photo albums, mugs or phone cases customized with images from their smartphone cameras.

Eighty-year old Canon, which is best known for printers and cameras, has struggled to stay relevant to consumers as photo taking has shifted away from stand-alone digital cameras to smartphones. Its revenue from cameras declined to 667.5 billion yen ($6 billion) last year from 970.3 billion yen in 2013.

Today, 90 percent of all personal snapshots are taken on mobile phones, Alberto Spinelli, the senior director of digital services at Canon Europe, said.

"We’ve been trying to address the question of how do we grow our business and become more relevant to new audiences," he said. Canon began a digital services business two-and-a-half years ago as part of that solution.

The Kite acquisition follows Canon’s April 2015 purchase of Lifecake, a London-based photo sharing service aimed at families. Spinelli said Canon would consider further acquisitions as it continues to beef up its digital service offerings. Terms of the Kite deal were not disclosed.

Kite, which was founded in 2013 in London, is a simple piece of software that enables customers to take a photo from their smartphone and have it printed on a personalized physical product.

The startup provides this technology through a set of software developer tools that allow programmers to build this service into their apps. It then takes a cut of the purchase price of the product the end users buy.

Kite’s technology is used by more than 500 technology firms -- including photo sharing services PicCollage and Enlight -- and has been installed on more than 200 million mobile devices, Charlie Carpenter, Kite co-founder and chief executive officer, said.

"The acquisition of Kite really enhances our proposition," Spinelli said. "It makes it really simple to translate the photo on the phone into a physical keepsake."

Canon and Kite both declined to disclose the terms of the acquisition.

The startup had been financed by Black Ocean, a Luxembourg-based investment group with offices in New York, London, Luxembourg and Moscow.

Spinelli said that Kite’s software could be integrated into Canon’s existing hardware devices, which include desktop printers and digital cameras.

Kite’s 12 person team will move to Canon’s offices in Shoreditch, a neighborhood that has long been the heart of London’s technology hub. Carpenter said that Kite would continue to operate as a stand-alone business unit, but that Canon would invest to grow Kite’s team "exponentially."

To contact the reporter on this story: Jeremy Kahn in London at jkahn21@bloomberg.net.

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Edwin Chan