Envato: The Most Profitable Start-up You Haven't Heard
It is the most successful and profitable – and least known – Australian start-up and global technology company.
It is more profitable than the likes of Atlassian, WiseTech and Campaign Monitors and has been entirely self-funded since being founded in a Bondi garage 10 years ago.
Meet Envato, which last year made a pre-tax profit of $US33 million ($43.3 million), and which provides four debutants on this year's BRW Young Rich List.
The company runs a series of markets for web designers, with its popular Themeforest site selling blog and website templates and themes for WordPress users, as well as some videos and music for websites. Themeforest is among the top 300 most visited websites in the world. Though it does not design the templates, it provides the forum or market for users to sell their designs, taking a share of sales when transactions are made.
It has been an extremely successful strategy. Envato's 2015 financial year pre-tax profit (its 2016 financials should be lodged with the Australian Securities and Investments Commission within about the next month) was double that of the previous year and revenue reached $US73 million.
Envato was founded by husband and wife team Cyan and Collis Ta'eed, and a long-time family friend, Jun Rung, in Collis's Bondi garage in 2006 and has not taken external funding since. Vahid Ta'eed, brother of Collis, joined the company in 2008 as an executive director.
The quartet all debut on the Young Rich this year. Collis & Cyan Ta'eed have combined wealth of $184 million while Rung and Vahid Ta'eed are worth an estimated $43 million each.
While the four Envato executives have some small outside investments, the vast majority of their wealth is tied to their shareholdings in the privately held Envato, which they started with the idea of an online market for stock photography and website components.
The company now reportedly boasts about 6 million members worldwide and is closing in on the 180 staff mark. It has won a swag of awards including Cyan Ta'eed taking home the 2015 Telstra Victorian Businesswoman of the Year prize.
'Work with purpose'
She told the awards night that Envato's operations were underpinned by a "work with purpose" ethos, with staff encouraged to "make the right decision, as opposed to the profitable decision".
That factor may have to do with the Ta'eed family being followers of the Baha'i faith, one of the most persecuted religious minorities in the world and one that encourages the abolition of the extremes of both poverty and wealth.
It could also be a reason why Envato has not pursued an IPO at any stage in the past decade, though its 2016 earnings are said to be flat compared to last year according to one source.
Envato also pays generous commissions to its users, reportedly returning more than $415 million to the freelancers who use the platform to sell their designs. In 2014, Cyan Ta'eed said 25 "creatives" earned more than $1 million on the Envato platform that year.
The four Envato executives also paid themselves only a combined $2.46 million in dividends in the 2015 financial year, only a small slice of the company's big profit.