Even Before Figma Deal, Design Startup Funding Looked Good

For design startups these days, things are looking good.

Adobe’s $20 billion agreement to acquire collaborative design unicorn Figma offers the latest evidence that investors and acquirers alike see enormous value in the space. And while we probably won’t see another deal like that soon, design continues to rank as a hot sector for startup investment.

It’s not hard to see why. In a screen-addicted age, businesses and consumers are increasingly reliant on tools that make navigating the digital world more intuitive and appealing. Much like good written and spoken communication, the ability to design compelling content is becoming part of the basic career skill set.

A host of startups are staking a claim for a leading role in this design-centric world. Using Crunchbase data, we pulled together a sample set of 27 companies funded in past five quarters that have collectively pulled in over $1.8 billion to date:

Usually, when we pull together this kind of broad sector list, we see a host of different competing themes and strategies at the top of the ranking. This time, however, a single idea permeated much of the ranks. This is essentially the notion that anyone can and ought to have the skills and tools to put together slick-looking content.

Startups that raised the most

This is the marketing pitch behind the most valuable company on our list: Sydney-based Canva, maker of tools for people without extensive graphic design experience to create engaging visual materials. Founded in 2013, Canva ranks as Australia’s most valuable unicorn, having raised $573 million to date, hitting a peak valuation of $40 billion a year ago.

Canva claims more than 60 million monthly active users who employ its software to cook up social media graphics, simple videos, presentations and other visuals. Although the company’s valuation has reportedly come down some since last year, it’s still the most prominent name among private, venture-funded design startups.

Picsart, a Miami-headquartered provider of video- and photo-editing tools and templates, is another heavily funded company with a mission to democratize design. It’s pulled in $195 million in venture capital to date, including a $130 million SoftBank-led Series C in August, 2021.

Founded in 2011, Picsart markets itself to content creators who don’t have a professional design background. They can use its tools and templates to do things like switch backgrounds from images, add text to photos, add stickers to pictures, and remove unwanted objects from images.

Other business models share more elements with Figma, a collaborative design platform that includes tools for brainstorming and prototyping. For instance, Miro, which has raised $400 million in venture funding to date, also focuses on visual collaboration through its online whiteboard. However, while Miro does pitch its offerings to design teams, it’s concentrating more heavily on other company functions, including marketing, engineering and product management.

Early-stage action

There’s plenty of early- and mid-stage investment in the design space as well. Themes include design tools for animation and 3D, as well as platforms to make it easier to find and hire talent.

On the animation front, one standout was LottieFiles, a 4-year-old developer of simple animations that users can customize and include in social media or online documents. The San Francisco-headquartered company pulled in one of the largest early-stage rounds—a $37 million Series B in May.

A month earlier, Gravity Sketch, a 3D design platform, landed $29 million in a Series A led by Accel. The London-headquartered company makes a free app with tools for sketching and modeling, as well as an enterprise product with enhanced security features.

If the do-it-yourself approach isn’t working, startups are also offering ways to more efficiently find and hire talented designers to complete projects. The most heavily funded early-stage player in this arena on our list is Superside, a design company that markets its services to enterprise teams. The company pulled in a fresh $30 million in a December Series A.

Design enters the fast-fashion age

Sometimes, when one looks at a list of funding rounds, the myriad business models sort of converge to conjure up an image of the future.

For design, if I had to stretch for an analogy, it would be something like the IKEA-ization of the online world. Decades ago, the model IKEA brought to home decor allowed regular people with regular budgets to put together designer-inspired furnishings and layouts, requiring little more than the patience to assemble things from flat crates. Another analogy might be fast fashion, which these days enables anyone with a bit of personal style to put together a runway-qualifying look on a budget.

In design, we see a similar ethos emerging. This is the notion that anyone can create a trendy, professional-looking website, a promotion-worthy presentation, or a slick-looking clip to share on social media. While enterprises will still be turning to professional designers and high-end tools for big-budget projects, we’re increasingly moving toward a world where those with modest means can also produce some pretty enticing visual content.

Illustration: Dom Guzman

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