(Updated) HP Buys Five Year Old Motionbox, Rumored Price Of $20M

Late in the day on Monday, Snapfish, the photo sharing service from HP, announced they had acquired NYC based Motionbox. The company, founded in 2006 by Chris O’Brien and Andrew Wason, provides consumers with a video platform service to easily upload, transcode, edit and share their videos. While terms of the deal were not announced, someone invested in the company tells me that Motionbox was valued at around $20M. Between 2006 and 2009, the company raised three rounds of funding totaling $17.2M, so if the valuation I’m hearing is accurate, this is one deal where the investors didn’t lose any money.

I still remember the first time I met Chris O’Brien, back when he was the CEO of SoftCom and I had just started a streaming media division for Globix. Looking back at my calendar, we first met up for lunch on November 17th, 1998 and since then, have had many conversations about the online video business over the years. When Chris co-founded Motionbox in 2006, and launched their premium service in late 2007, it was at a time when tons of UGC websites were popping up. But unlike the UGC sites that simply tried to get a lot of traffic and sell a ton of ads, Chris was always focused on keeping Motionbox as a service that protected customers videos, giving them the tools to quickly, easily and safely share their content online.

While Motionbox had nearly 3M members, for Snapfish, this deal was all about about Motionbox’s video tools and not their revenue or customers. HP has already announced that Motionbox will close down on August 10th and Motionbox customers can get a 30-day free trial with Snapfish and join their more than 90M members in 22 countries.

Congrats to the Motionbox team and hopefully this deal sets up similar companies like Magnify.net and others to get acquired next.

Update: This morning I heard from three other sources who said the $20M evaluation would be on the high end of the range and would only be achieved if certain performance goals were met. I don’t know what those goals are, but some of them are probably tied to how many of Motionbox’s 2.8M customers sign up for accounts at Snapfish.