DesignCrowd scores $3m, set to go abroad

Summary:Sydney-based start-up DesignCrowd has scored $3 million in venture capital from Melbourne firm Starfish Ventures and is planning to use the funding to expand internationally.

Sydney-based start-up DesignCrowd has scored $3 million in venture capital from Melbourne firm Starfish Ventures and is planning to use the funding to expand internationally.

(Crowd-sauce image by Steve Winton, CC2.0)

DesignCrowd provides an online marketplace for businesses to crowdsource their creative projects to others. It is a similar concept to 99designs, which started out in Melbourne and won US$35 million in funding earlier this year, and Freelancer, founded by Sydney entrepreneur Matt Barrie.

DesignCrowd has already attracted 40,000 graphic designers and its clients include the Harvard Business School.

In 2009, the business raised $0.3 million from angel investors and since then has grown more than 1300 per cent under founder and CEO Alec Lynch's command.

Starfish Ventures investment director, Tony Glenning, said he was attracted to the idea of crowdsourcing, rather than outsourcing.

"[Outsourcing] ends up as a race to the bottom and is neither beneficial to the customer nor the designer. Alec and his team have done a great job providing a unique offering that serves both," Glenning said.

"We're really, really pleased to have [Starfish] on-board. Out of the venture capitalists we spoke to, they were our top pick. We're over the moon to have Starfish and the experienced people they've got joining the team," Lynch said.

He also told ZDNet Australia that the company is planning to expand the business internationally using the new funding, as well as taking crowdsourcing into new markets.

"Australia is a good market for crowdsourcing. The economy is strong and general graphic design is linked closely with economic activity, but in terms of gross markets, it's important to look at countries where there's a lot of small business activity and a lot of small businesses starting up annually. The American market is way bigger than the Australian market."

99Designs has done the reverse, starting out in the US market and recently re-targeted the Australian market. Yet Lynch wasn't concerned about it or more general crowdsourcing initiatives like Freelancer, which has already gone international.

"Our focus is crowdsourcing creative projects. True crowdsourcing, as opposed to online outsourcing, works best for creative industry and creative projects. That's really our focus and our specialty."

The company is now looking to hire aggressively to match its expected growth, planning to hire an additional 10 people within three months. Lynch has spent much of his recent time at Fishburners, a co-location workspace in Sydney for tech entrepreneurs, to interview potential team members.

"We've started getting bombarded with applications, but we need to be very picky — we're looking for the best of the best. We have all these plans and dreams, but what we need are great people."

Topics: CXO, Start-Ups


A Sydney, Australia-based journalist, Michael Lee covers a gamut of news in the technology space including information security, state Government initiatives, and local startups.

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