Creative Market Nabs $1.3M From SV Angel, CrunchFund To Become An Etsy For Digital Design

Earlier this year, ColourLovers founders Aaron Epstein, Chris Williams and Darius A Monsef IV (a.k.a. Bubs) launched Creative Market in private beta to give its community of color and template-creating designers a place to sell their digital content. And, today, they’re announcing that they’ve closed a second round of funding to support the impending launch of Creative Market. (Which Monsef says is slated for the next few weeks.)

The $1.3 million in new funding comes from new investors, which include SV Angel, CrunchFund, Longworth, Ludlow Ventures, and a number of YC alums, and brings the startup’s total funding to $2.3 million. Existing investors, like Atlas Ventures, Morado Ventures, 500 Startups, Seraph Group, and Zelkova Ventures also contributed to the round.

For a bit of background on how they got here: In early 2011, fresh out of Y Combinator’s accelerator program, the co-founders re-launched ColourLovers as an online creative community that seeks to bring out your inner designer by allowing veterans and noobs alike to create their own colors, palettes, shapes, and patterns. Originally launching in 2005, the site has grown organically to the tune of 2 million registered users, spurred on by partnerships with Twitter, Martha Stewart, HP, and Hearst, to name a few.

Yet, ever since the redesign, Monsef tells us, the founders have been looking to add a marketplace to the community, which would allow its designers to hawk their own design content — everything from icons to brushes and fonts. That’s where Creative Market and its supporting financing enter the picture.

And to that point, what the founders are perhaps most excited about is the strategic investment from Threadless, the popular eCommerce platform and community of whacky t-shirt designers, that comes as a part of the round. Given the similar makeup of their end users, the partnership/investment makes sense for both companies. Now, designers and creatives will be able to go to Creative Market to buy some nifty designs and then hop over to Threadless to make their t-shirt ideas come alive, while Threadless designers will be able to sell their wares in CM’s marketplace.

While ColourLovers users have shared over 5 million colors, 2 million palettes, 2 million patterns, and 160K templates, the co-founders say that their focus is now going to center on Creative Market, which they feel can make a bigger impact — and generate more revenue.

ColourLovers has an engaged and active user base, and has grown steadily over its 7 year history, but it’s still only seeing about $500K in annual revenue. So, the founders are modeling their new direction — the marketplace for digital design content — on Etsy, trying to do for “mousemade goods” what the eCommerce site did for hipsters and handmade goods.

After all, Etsy has been killing it, having raised nearly $100 million while doing cool things for its community — like giving female programmers $5K to go to “hacker school.”

Of course, comparing the two might seem a stretch at first, considering that it’s a bit more difficult to imagine a huge market for color vectors and palettes. But, considering the fact that designers and developers are forced to go to different resources to find or buy images, fonts, filters, colors, etc., it’s kind of a no-brainer to bring each link in the design chain under one roof to create a kind of stock art marketplace for design content.

Plus, ColourLovers acquired Forrst back in March, a similarly themed forum/community, where users share designs and code, get feedback from other developers, ask questions and post about design topics. The site had some cache in the community, and the combined assets give the startup a sizable inventory to begin leveraging in its new marketplace.

Furthermore, since launching Creative Market in private beta, the site has seen 75K people sign up for its waiting list. As part of the beta launch, Creative Market offered a free goods page, aimed to give users a taste of what kind of digital content will be in store. Monsef says that, thus far, they’ve been seeing 100K downloads a week of those assets, which they believe is an early indication that there could be a big market for digital content.

Although 99designs has taken flak from the design community, it seems ColourLovers and Forrst have more credibility, and there’s a high likelihood that designers are going to love the fact that Creative Market will give them the ability to make some extra cash from selling their digital content. Plus, the founders are also hoping to lure designers by offering them a bigger cut of sales. Compared to the typical designer-takes-30-percent model, Monsef says that Creative Market will likely offer designers at least twice that percentage.

What’s more, there are currently about 40 million people using Adobe’s Creative Suite in some capacity. But, if you’re anything like me, there’s a very good chance you know at least one or two people using PhotoShop (or another Adobe product) for free. While many of those users probably didn’t pay for PhotoShop, they’re willing to make incremental purchases to buy templates or fonts for use in their design work — and that’s where Creative Market comes in.

While Creative Market will be a destination site, the team is also working to launch an API in the next few months, which will allow any site to set up their own version of Creative Market, adding “buy” buttons to their own designs and wares.

Along with slow load times, crappy design is a top website killer, so giving design and development teams the ability to go out and quickly buy fonts, colors, templates, and the like that have already proven successful elsewhere gives site owners a leg up and a quick, easy way to get back to focusing on product. That way, if their site fails, they can’t blame it on design. (For better and for worse.)

Creative Market will launch officially in beta in the next few weeks, with a full public unveiling expected for later this summer. You can sign up early and get $5 off its digital content here.