$200 million startup Imgur cut 15 percent of its staff months after Reddit built a competitor

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Imgur, home to "the most awesome images on the internet," has had a tough year.

In late May, Reddit ditched Imgur after making its own photo-uploading tool, even though Imgur had long been the popular repository for the funny images that make up Reddit.

A few months later in August, the company laid off 15% of its workforce, including a large part of its data engineering team as it shifted direction, Business Insider learned. The layoffs have not been previously reported.

Imgur spokeswoman Michelle Masek confirmed the layoffs, but said it wasn't a direct result of the Reddit's move.

"We have a great relationship with Reddit and their decision to roll out their own image-uploader wasn't a surprise; tools for uploading images are a required part of any platform these days," Masek said in an email to Business Insider. "Our decision to eliminate positions wasn't at all connected to anything Reddit did, it was to better align our resources against our mission of surfacing the world's most entertaining content and our vision of lifting the world's spirits for a few moments every day."

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Boot-strapping to boom

The file-sharing site was famous for bootstrapping, or not raising any external money for the company at first.

Alan Schaaf founded the company in his junior year at Ohio University in 2009 and ran it entirely off donations for the first six months. As the site took off, the bills also grew so it started selling pro accounts, but continued to not seek venture capital. Imgur's (pronounced image-er) prolific boot-strapping won it the Best Bootstrapped Startup award two years in a row at the Crunchies, a tech awards show.

It wasn't until 2014, five years after Imgur's launch, that the startup raised $40 million from famed Valley venture firm Andreessen Horowitz. Also in the round was Reddit: "an appropriate nod to founder Alan Schaaf originally building Imgur as a 'simple image sharer' for the Reddit community," the press release said at the time. Imgur's connection to Reddit was always informal — the Reddit community had long embraced Imgur as a way to upload photos but there was never any technical partnership between the two companies.

With fresh venture capital, the team expanded from the dozen people it had in 2014 to nearly 70 people in 2016. In a Product Hunt Live session, its CEO, Schaaf, said that "2016 is all about building the team". However, the layoffs to the data engineering side of the company cut around 10 people or 15%. The company insists its still hiring aggressively as it shifts focus.

"Several months ago we did eliminate a small number of positions that no longer match our long-term strategy. We're continuing to grow our headcount, and we're actively hiring across several departments including engineering, sales, account management, and creative strategy," Imgur's spokeswoman Masek said in an email.

The few open jobs available at the company today largely evolve around advertising and its mobile apps. The company is working to make Imgur ubiquitous on mobile, but by accepting venture capital money, it also to work on driving returns for its investors. The 2014 funding round valued the company at $200 million, so the startup has to work on growing its revenue to match investor expectations.

"Mobile platforms are our major focus, and we already see the majority of our community engagement coming from Imgur's mobile platforms. We're also helping brands authentically connect with our massive community of millennials, and we're continuing to scale up our efforts with advertisers," Masek said.

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