Anticipating high demand around video consumption on smartphones, the company has purchased little-known startup, which plans to launch mobile apps later this year.
Eleven-year-old StumbleUpon, a Web and mobile destination for exploring digital content, has made its first acquisition, picking up pre-launched Canadian startup 5by in an attempt to master video recommendations on smartphones. Terms of the deal, which closed in mid-September, were not disclosed.
Founded in 2012, 5by is in the process of building an iOS and Android application for finding videos to watch based on your mood. The 5by mobile application will continue to be developed and released as a standalone product in the coming months, StumbleUpon CEO Mark Bartels told CNET. A beta desktop version of the experience is already live.
"Video discovery, video consumption is its own little monster," Bartels said. "They're on to something," he said of 5by's Songza-like approach to recommending videos.
StumbleUpon, which has 30 million registered users and 100,000 advertisers, is currently profitable. The company said it made $30 million in 2012 and expects to bring in between $35 million and $40 million this year.
5by will eventually become another distribution channel for StumbleUpon's advertisers who pay to have their digital content promoted to targeted audiences. The startup's team of six people, including founder Greg Isenberg, will move from Montreal to work in StumbleUpon's San Francisco office.