Sydney start-up DesignCrowd has raised its second $3 million in funding from Australian venture capital firm Starfish Ventures, giving it a total of $6.3 million.
The company was founded in a garage by Alec Lynch in January 2008 as a marketplace for offering and accepting design projects. It now has 20 staff and has facilitated $12 million of projects, completed by almost 150,000 registered designers.
Lynch said the new capital raising round meant that Starfish Ventures now had “a significant minority stake in DesignCrowd” with its total $6 million investment, while the founders and angel investors – who initially invested $300,000 – “still hold a large stake in the business”.
Starfish Ventures investment director Anthony Glenning told The Australian today that DesignCrowd was “on a path to profitability”, with revenues up 500% in the past two years:
“Without the second investment we would expect them to have achieved profitability some time mid-next year. They didn’t have to have the money, but we saw a tremendous opportunity for further funding to hire more people, open an international office and expand marketing efforts.”
DesignCrowd said today that it would use the new funds to open a US office and hire sales and marketing specialists there within the next 12 months, and continue to scale its international marketing efforts.
“The US market is at the top of our list of priorities,” Lynch said. “It’s become our biggest source of sales despite not having an office or any employees there.
“The extra capital will also help us explore new markets including Europe, South America and Asia and allow us to invest further in new products and features.”
DesignCrowd charges users $40 to list each design project and takes a 15% commission from designers’ earnings.
It competes with freelance jobs listing sites Freelancer.com, oDesk and fellow specialist site 99designs.
Freelancer.com is due to list on the ASX this week with a market capitalisation of $218 million.
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