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Published 12 November 2013 08:25, Updated 13 November 2013 07:28
DesignCrowd founder Alec Lynch. Photo: Jim Rice
Australian crowdsourcing marketplace DesignCrowd has won a further $3 million in funding from Starfish Ventures, which it plans to put towards expanding its United States operations.
The funding round brings DesignCrowd’s total external funding to $6.3 million, and the company will hit $10 million in revenue this financial year if it continues at current run rates.
Founder Alex Lynch launched the site from a Sydney garage in 2007 with $10,000 in savings and three credit cards. He raised $300,000 in seed funding from angel investors, then an initial $3 million from Starfish Ventures in 2011. Starfish’s Anthony Glenning sits on DesignCrowd’s board.
DesignCrowd helps businesses outsource designs for things like business cards, t-shirts and websites by holding online competitions.
Lynch says only 25 per cent of the company’s revenue comes from Australia, and 40 per cent comes from the United States despite not having any offices or staff members there.
“We think investing in that market and others outside Australia is a huge opportunity for us,” Lynch says. “Crowdsourcing sites have basically about 0.1 per cent market share of the global graphic design industry, which is really big – around $44 billion. It’s still really early days.”
Around 147,000 designers now use DesignCrowd, Lynch says. “There’s about 131,000 designers employed at all the design studios in the US. Businesses can now access more designers through DesignCrowd than if they doorknocked every design studio in the US.”
He claims a distinction from much bigger rival 99Designs by offering participation payments to designers, even if their design isn’t accepted in the end.
“We make it more lucrative and fairer for designers,” Lynch explains. “We’ve paid close to $2 million in participation payments. This allows us to attract higher quality designers and reward better designers for participating, which in turn creates better experiences for businesses participating and buying design through our service.”
99designs raised $US35 million from US venture capital firm Accel in 2011. It acquired German competitor 12designer last year and in August acquired Rio de Janeiro-based competitor LogoChef.