EZ Prints, an online private-label processor of digital photos and images, has turned to some familiar faces to land its fourth, and possibly final, round of private equity.

PA Early Stage Partners, a unit of Pennsylvania-based technology investment firm Safeguard Scientifics, and international investment group The Cairnwood Group led the $4 million round. The two firms have been longtime investors in EZ Prints, which has raised almost $10 million in funding since it was founded seven years ago.

The money will allow the company, which has a small headquarters office in Atlanta and its major base of operations in Orlando, Fla., to expand its sales force and customer service capabilities to enter new markets, says Vice President of Business Development Darren Schiff.

“We want to handle medical images, insurance images, real estate images, all of which have huge potential,” Schiff says. “We’ve been constrained to this point by (personnel) considerations, and we expect to be able to move into those areas now.”

EZ Prints now employs 25, and Schiff expects the company to add another 10 to 15 people in the next six months.

Revenue keeps increasing

The company also expects to become profitable by the end of the year after posting 24 straight months of revenue growth. It has built a business of providing high-quality prints of digital photos to commercial photographers and consumers through private-label partnerships with companies such as Nikon, Sony, Microsoft and Yahoo!

Originally founded in Philadelphia as Phototronics, the company moved its operations south two years ago. Schiff says the company initially tried to build a national brand for itself but realized it couldn’t compete against market giants like Kodak and Fuji.

“We don’t care about our brand now,” he says. “We work behind the scenes with our back-end technology and let our partners put their names all over our work.”
EZ Prints has “a very active sales force” that has allowed it to build a network of more than 200 business partners, and Schiff says the company is counting on that aggressiveness to penetrate and become successful in the new vertical markets.

“There are multiple on-ramps and off-ramps for business in this industry, with retail, the home computer and high-speed professional processors,” he says. “No one offers the value proposition that we do.”

Lean structure, technology help

What sets EZ Prints apart is its emphasis on customer service, with guaranteed 24-hour turnaround on orders, and a cost structure that passes along huge discounts to customers, he says. Using the Internet to transfer data instead of a chain of stores and printing thousands of images every day produces economies of scale that allows the company to price large, high-quality prints as much as 80 percent cheaper than competitors.

In addition to expanding its sales and service capacity, the latest funding will also help pay for more sophisticated processing equipment, Schiff says.

“EZ Prints has a strong business model, leadership team and relationships with
strategic partners in the photo industry,” Scott Nissenbaum of PA Early Stage Partners said in a statement. “These elements, combined with the company’s strong track record of growth, clearly position EZ Prints as a leading competitor in the online image and gift fulfillment market.”

EZ Prints Website: www.ezprintsinc.com