Australian online design company DesignCrowd is looking to introduce new products and concentrate on growing their business globally — with a focus on the U.S. — after securing a $7.7 million funding round.
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This raise comes after the company grew subscription revenue by 11 times in calendar year 2020 — and net revenue by 54 percent year to year for the year ended last June.
“It was a great time to raise capital,” said founder and CEO Alec Lynch. “We have an exciting product roadmap …The new capital will allow us to grow our team.”
Designing a design company
DesignCrowd’s growth has been driven in part by the introduction of its new DIY design tool on BrandCrowd, which helps entrepreneurs and small business owners make logo designs for marketing purposes as well as social media posts and emails. The company also houses its DesignCrowd platform, which is a crowdsourcing platform of more than 800,000 freelancers who helps companies develop logos.
The BrandCrowd platform alone saw 5 million users create accounts last year, Lynch said.
That growth led the company to raise the new money as it looks to expand in different markets, however it will have a “massive focus” on growing the U.S. market where it already sees more than 50 percent of its revenue.
Founded in 2007, the 60-person company has raised nearly $17 million to date.
Rajeev Gupta, partner at Alium Capital, said the company was an intriguing investment opportunity on several levels, including because of its growth and capital efficiency as well as the growing design market due to so many new companies forming.
He added the design market in general in Australia is rather robust, with large companies like Canva, which has raised more than $300 million according to Crunchbase data.
While the new round is being called a “pre-IPO fundraising” to help position the company for a potential offering on the Australian Securities Exchange, Gupta said there also has been dealmaking in the sector, including Vistaprint’s parent company Cimpress acquiring freelance design marketplace 99designs last October.
While either exit remains viable, Gupta said a listing is definitely possible.
“They could have IPO’d in calendar year 2020 in Australia,” said Gupta, adding he believes the company has more growth ahead of it before such an event.
“Our plan A is to one day IPO in Australia,” Lynch said. “This (round) helps position us for that.”
Illustration: Li-Anne Dias.
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