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UPDATE 2-Shutterstock clicks with investors in market debut

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* Shares rise 34 pct in market debut

* Company valued at more than $700 mln at day's high

(Adds analyst comments, industry background)

By Avik Das and Ashutosh Pandey

Oct 11 (Reuters) - Shutterstock Inc soared 34percent in its market debut, valuing the company at more than$700 million, as investors bet on strong demand for thecompany's stock images from multimedia customers, especiallyonline.

Shutterstock, which has more than 35,000 approved imagecontributors, offers more than 20 million photographs andillustrations that customers can license and download throughsubscriptions.

Growing demand for online images has raised interest incompanies that provide such services, with Carlyle Group LP

snapping up Getty Images for $3.3 billion in August.

Shutterstock said in its IPO filing that a sponsored studyshowed that the market for pre-shot commercial digitalphotographs would grow by nearly 50 percent to $6 billion in2016.

Investor interest in Shutterstock and its subscription-basedmodel helped the company raise $76.5 million at $17 per share,21 percent above the midpoint of the expected range.

"It's a well-established brand. It has a lot of users andhalf of its revenue comes from subscriptions," Francis Gaskinsof IPO Desktop.com said. "It has a positive cash flow andtop-line revenue is increasing."

The company, which recorded revenue of $78.1 million for thesix months ended June 30, had more than 550,000 customers as of2011, Shutterstock said.

Chief Executive Jonathan Oringer, who founded Shutterstockin 2003, will now hold about 57 percent of the company followingthe offering. Private equity and venture capital firm InsightVenture Partners will own 21 percent.

Shutterstock competes with other online providers of imagessuch as iStockphoto, Fotolia, Dreamstime, Getty Images andCorbis Corp.

The company's shares were up 27 percent at $21.58 on the NewYork Stock Exchange in afternoon trade.

(Reporting by Avik Das and Ashutosh Pandey in Bangalore;Editing by Sriraj Kalluvila)

((avik.das@thomsonreuters.com)(within U.S. +1 646 2238780)(outside U.S. +91 80 4135 5800)(Reuters Messaging:avik.das.thomsonreuters.com@reuters.net))

Keywords: SHUTTERSTOCK IPO/