Freelance Marketplace DesignCrowd Raises $3M To Fuel Its International Growth

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DesignCrowd, a crowdsourcing marketplace for freelance designers, has raised $3 million in new funding from investors led by Starfish Ventures. This brings the Sydney, Australia based company’s total raised to date to $6.3 million. DesignCrowd will use the proceeds to open a U.S. office and scale its international marketing.

Since its last funding round in November 2011, DesignCrowd says that its revenue has grown 500% to $1 million per month. The company plans to open an office in the U.S., its biggest source of sales, in the next 12 months, as well as begin expanding into Europe, South America and Asia.

In the six years since DesignCrowd’s launch in 2007, a score of online design marketplaces that use a crowdsourcing model have sprung up (about 40, DesignCrowd CEO Alec Lynch tells me). Its says its main competitors are 99designs, oDesk and Fiverr. As it expands, DesignCrowd seeks to differentiate and increase its talent pool (and in turn attract more clients) with a crowdsourcing model that includes a participation payout. This means that designers are eligible for a payment (usually about $20 to $50) if they participate in a design contest even if they don’t win. DesignCrowd has paid out over $1 million in participation payments so far and also gives designers a second chance to sell their work through BrandCrowd, which it acquired in 2011.

DesignCrowd monetizes by taking a 15% commission from designers and charing client fees for design projects. Most client budgets range from around $100 to $10,000, with most projects averaging at about $350. The company currently has over 250,000 registered users in 197 countries, including 100,000 designers and says it recently hit $12 million in design projects through its site, a figure that it expects to exceed $20 million in 2014. Most designers are currently based in the U.S., India, the UK and Australia, with Indonesia, the Philippines and Pakistan being its top emerging countries. Most clients are in the U.S., Australia and the UK, while its fastest growing markets are the U.S., Brazil, Singapore and Germany.

Lynch, who co-founded DesignCrowd with Adam Arbolino, says that his company’s crowdsourcing model is more fair and transparent than the ones used by competing sites.

“DesignCrowd’s crowdsourcing model is faster, cheaper and better than our competitors,” he adds. “The biggest opportunity for DesignCrowd is to take a larger share of the $44 billion traditional design industry and this is our focus.”