The merged business will take the name DesignCrowd.com, and offers designers a marketplace to pitch work for clients who have posted projects on the site, including logo, t-shirt, poster and even business card design.
Managing director Alec Lynch, who refused to comment on the size of the acquisition, said the deal was made possible through angel investors and is part of an effort to expand overseas.
"I'd been running DesignBay for a year and a half, and then I started looking for capital to raise it to the next level. I used some networks, found some angels and then came across this website months later."
"We thought it had a really good community, so we decided to buy both the name, and the community, and then improve our product in two different ways at the same time. It gave us a nice mixture of talent from the US and cost effective talent from India."
Lynch would not disclose revenue of the merged business, but says sales are growing 20% month-on-month, while member registration is expected to hit 70,000 next year.
He also claims DesignCrowd is a more comprehensive offering than rival 99designs, by offering access to a range of designers who will receive participation payments in order to make the process fairer, and more lucrative.
"Our different offerings come out of the two original sites. DesignCrowd was more of a traditional online outsourcing model where you would get quotes, choose one designer and then work with that designer. But our new website puts the two models together."
"We give clients the choice of crowdsourcing, or simply getting quotes and then one designer to work with. Our view is that different projects suit different styles, so if you need a lot of creativity then you go with crowdsourcing, but simpler or more complex projects suit working with one designer."
Lynch also says DesignCrowd offers a number of different project sizes, and even gives out participation payments in order to keep its membership dedicated to the site.
"We have smaller projects and larger projects, and that's what the quote system providers - a range of projects. But we also give away different payments, we distribute first and second place prizes, but also participation payments which are guaranteed. People can reserve them, and they know they will get that payment even if their work is not selected."
Lynch also says these payments mean the site is able to attract a higher quality of work compared to its rivals.
"We make an effort to protect our designers, and so there is no groupthink, no copying, each contest is 100% open and we've refined that to make it so."
"So for now the integration is done, but we're going to be looking at more ways to leverage the current design crowd. We're going to be looking at different applications of crowdsourcing outside graphic design, and expand the product range."
