What happened
Lightricks, creator of the Facetune photo editing app, is separating its consumer app business from its generative AI video platform, LTX, according to an internal memo. Facetune, a profitable consumer software model, generated approximately $100 million in profit last year. LTX, founded in 2024, received $150 million from Lightricks and achieved 3 million downloads for its open-source AI model on Hugging Face in its first month. This restructuring positions Lightricks to capitalise on distinct market valuations for traditional software and high-growth AI ventures.
Why it matters
Investor appetite for pure-play AI is driving corporate restructuring, even for profitable legacy businesses. Traditional software valuations are being outpaced by AI ventures, which investors perceive as having greater growth potential. Shlomo Dovrat, a Lightricks board member, noted that a pure disruptive AI business can command a valuation reflecting a $600 billion market opportunity, unlike a growing software business. Founders and investors must now evaluate business structures to align with these distinct market preferences, as seen in the recent surge of AI-focused startups.
