US venture capital powerhouse Accel Partners has invested US$35 million into fast-growing crowd-sourced design marketplace 99designs, which is headquartered in Melbourne and was created in early 2008 by the founders of popular online web development forum SitePoint.
99designs bills itself as the number one online marketplace for crowd-sourced graphic design solutions and has 26 staff in Melbourne and San Francisco. The site provides a marketplace for designers to find clients, communicate with peers and show off their work. The company's investors include SitePoint founders Mark Harbottle and Matt Mickiewicz, who spun 99designs out of the SitePoint forums — as well as fellow SitePoint director and IT entrepreneur Leni Mayo. Former Hitwise chief executive Andrew Walsh also has a stake in the company.
So far, over 99designs' life, it has paid-out over US$19 million to designers, hosted some 75,000 projects and garnered attention from over 100,000 designers in 192 countries. The site's logo store has more than 10,000 logos available for customisation and purchase.
In a statement, one of Accel's venture capitalists, Michael Dearing, said that the site caught his attention when he realised that "nearly every one of the early stage companies and entrepreneurs I work with was turning to them to get great design work done".
"The team has created a marketplace that is easy for companies to get onboard with, and is also a boon for designers who can go after any of the hundreds of jobs open at any one time," he said.
TechCrunch has reported that some of the capital will go to the founders of the site, while the rest will be invested in "international expansion, platform development, community initiatives like design scholarships" and "aggressive hiring" in both San Francisco and Melbourne.
"To date, very little has been spent on marketing," wrote Harbottle on the site's blog today. "Our growth has been based purely on word-of-mouth. We have also never taken external investment — every cent has been invested back into the business. While extremely proud of that fact, we are acutely aware that for 99designs to grow and take the next step that needed to change."
"We plan to spend a good chunk of this investment on distribution and marketing, which means more customers for our design community. We also plan to build out the platform with many of the features our customers and designers have been asking for to improve the overall experience. And finally, we will create new and exciting opportunities for designers to connect with clients, enhance their skills, and earn an income doing what they love."
99designs chief executive Patrick Llewellyn also told TechCrunch that the company needed the funding partially because it found it hard to hire once it moved its sales division to Silicon Valley in the US. "Any employee you look to hire here asks, 'Who funds you?'" he said. "You realise there's a psyche that's very different from Australia. To go to the next level and bring on the talent we wanted was going to be hard being a bootstrapped company from Australia."
The funding injection represents the third large investment by Accel Partners in an Australian company in the past year, with the venture capital firm pumping US$60 million into local software-as-a-service business Atlassian and a reported amount between US$70 million and US$100 million in online payments group OzForex last year.