The company behind the popular Facetune photo editing application is restructuring its operations by dividing into two distinct business units, according to internal company documents obtained by Reuters.
Lightricks, the design software developer, plans to separate its consumer application division from its artificial intelligence video platform called LTX. This strategic move reflects the company’s effort to better position itself in the rapidly expanding AI market while traditional software businesses face changing investor sentiment.
This restructuring follows a growing trend among technology companies that are isolating their established operations from emerging AI ventures as investment communities reevaluate older software models in favor of artificial intelligence opportunities.
The Facetune application represents a successful software model from the previous decade, built on repeat users and gradual product enhancements. A source with knowledge of the company’s finances indicates the app produced approximately $100 million in profits during the past year. Meanwhile, LTX operates within the generative AI sector, where investors demonstrate willingness to pay premium prices for potential rapid expansion similar to venture capital growth patterns.
LTX, which launched in 2024, has received roughly $150 million in funding from its parent organization Lightricks. The company reports that its open-source AI model platform achieved 3 million downloads during its initial month on Hugging Face, a widely-used platform for sharing and operating machine learning models.
Investment interest significantly influenced the decision to divide the business operations. The rapidly growing business-to-business LTX division has generated greater investor attention compared to the established business-to-consumer Facetune application, as financial backers pursue the substantial returns they anticipate from AI development. This separation may also create opportunities for LTX to secure outside funding or consider an independent spin-off, demonstrating stronger market enthusiasm for dedicated AI companies rather than diversified software platforms.
Shlomo Dovrat, who co-founded venture capital firm Viola Ventures and serves on Lightricks’ board, explained the valuation challenges facing traditional software companies. “Even if you grow 25%, the software business, you won’t get the same valuation you get for a pure disruptive AI, which has a $600 billion market opportunity ahead of it,” Dovrat stated.
Dovrat emphasized that the separation involves more than financial considerations, describing it as managing two different types of businesses. He noted that creating separate units provides various options, including potential spin-offs or other strategic moves, with the company founders planning to concentrate on leading the artificial intelligence division.
“We’re making amazing returns just on the software business, we believe we will do even much, much better on the AI side,” Dovrat added.
