Sydney-based crowd sourcing design website DesignCrowd has finalised a $3 million investment from local venture capital firm Starfish Ventures, with founder and chief executive Alec Lynch saying the money will be used to break into international markets.
The funding is yet another investment in the local tech sector, which has heated up over the past two years as both local and international venture capitalists spy products that are well catered to scale to a global audience.
“Our kind of growth plans really require a capital injection, and this is exactly what we need to take the business further out from Australia and adopt some new product ideas,” Lynch told SmartCompany this morning.
DesignCrowd was founded in 2008 by Lynch, and allows businesses and individuals to pitch ideas to designers, who then create a variety of work for the client to choose from – similar to another major crowdsourcing site, 99Designs.
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In a few years the company now rakes in millions in revenue, and is operating across 159 countries. Originally funded by a $300,000 investment from angels, Lynch says attracting a venture capital firm was the next step in its growth plan.
“We want to move into international markets. We need capital to put our services in front of millions of businesses across the world, and we need to move beyond Australia which represents only a small portion of the global market.”
Tony Glenning of Starfish Ventures led the investment, and said in a statement the DesignCrowd site does a good job of fostering clients rather than just providing a marketplace, “which ends up as a race to the bottom”.
Starfish, which has a number of investments in the information technology space in Australia and controls $385 million in funds under management, will help focus the company on expanding outwards.
But DesignCrowd is also facing a lot of competition, especially from its closest rival, 99Designs; though Lynch says there is plenty of room for both companies.
“We both want to move into international markets, and there are tens of millions of businesses across the world where we can put our services,” he says.
“The market is very big, and very fragmented.”
Right now, DesignCrowd intends to hire 10 new employees by January. It’s a testament to the rapidly expanding IT sector in Australia, which has seen a number of investments from both local firms and investors in Europe and the United States.
Lynch also says he plans to launch two new services over the next year, due to the new investment.