Crowdsource design giant 99designs says start-ups looking to secure funding need to justify how the money will be used, after the company revealed how its $35 million investment will be used to accelerate its growth.<\/p>\n
<\/span><\/p>\n <\/p>\n Founded in Melbourne in 2008 by Mark Harbottle and Matt Mickiewicz, 99designs is the largest online marketplace for crowdsourced graphic design services.<\/p>\n <\/p>\n Last year, the company received $35 million in funding from venture capital firm Accel Partners, known for its investments in Facebook, Groupon and Dropbox.<\/p>\n <\/p>\n Now it\u2019s been revealed 99designs has doubled the number of monthly design contests held on its site year over year, and has hired key staff to meet demand.<\/p>\n <\/p>\n The company, which has held more than 115,000 design contests on its site, has doubled the run rate of new contests from a year ago. It is on track to surpass 200,000 contests by year end.<\/p>\n <\/p>\n The amount of money 99designs distributes to its designers each month also continues to surge.<\/p>\n <\/p>\n The company expects to pay out approximately $1.5 million to its design community for contests held in January alone, which is twice the amount designers earned for January contests last year.<\/p>\n <\/p>\n To date, 99designs has paid out more than $28 million to designers, and projects it will pay out $25 million to its designer community in 2012.<\/p>\n <\/p>\n The company has also doubled its staff to more than 50 employees, including Jeff Titterton as chief marketing officer, and former eBay executive Caroline Moon as chief financial officer.<\/p>\n <\/p>\n 99designs chief executive Patrick Llewellyn says 2011 was a standout year, from rapid growth in contests and payouts to the launch of localised versions of the site in Australia and Canada.<\/p>\n <\/p>\n \u201cIn 2012, we\u2019re focused on continuous improvement of our services as crowdsourced graphic design enters the mainstream,\u201d Llewellyn says.<\/p>\n <\/p>\n In addition to the company\u2019s recent recruitment drive, Llewellyn says the $35 million investment from Accel Partners has been used to provide shareholder liquidity.<\/p>\n <\/p>\n \u201cWe\u2019ve been able to provide the founders, and early stage investors and employees, with some liquidity,\u201d he says.<\/p>\n <\/p>\n \u201cWe\u2019re still focused on running the business pretty much the same way we did when we were bootstrapped\u2026 [So the funds are] sitting in the bank.\u201d<\/p>\n <\/p>\n \u201cWe\u2019re still mindful of producing a business that can pay for itself \u2013 we\u2019re focused on making sure the business model is self-sustaining.\u201d<\/p>\n <\/p>\n Llewellyn admits more money is being spent on things like international travel as a result of the investment, enabling 99designs to \u201cgrow up\u201d as a business. Expansion plans are also underway.<\/p>\n <\/p>\n \u201cWe\u2019re continuing to look at international expansion opportunities, all the while trying to ramp up recruitment,\u201d he says.<\/p>\n <\/p>\n Aside from the US, Australia and Canada, Llewellyn sees opportunities for the company in the United Kingdom, Europe and Latin America, while Asia is also pegged as a future target market.<\/p>\n <\/p>\n \u201cWe\u2019re looking to hire aggressively in Australia \u2013 it\u2019s the best place on earth to develop software and has built a great web presence,\u201d he says.<\/p>\n <\/p>\n \u201cWe\u2019re fitting out a new office in San Francisco, and need to fit out a new space in Melbourne.\u201d<\/p>\n <\/p>\n Llewellyn points out that 99designs didn\u2019t seek investment \u201cuntil we thought we knew how to spend it\u201d, urging other start-ups to do the same.<\/p>\n <\/p>\n \u201cIt\u2019s important to have a business plan you believe in, and clearly identify areas you wish to spend money on\u2026 Feel like you can really justify what you will spend the funding on,\u201d he says.<\/p>\n <\/p>\n \u201cDistributing funding is a challenge [so] have a plan.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Crowdsource design giant 99designs says start-ups looking to secure funding need to justify how the money will be used, after<\/p>\n","protected":false},"author":2,"featured_media":60878,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/41468"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=41468"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/41468\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/60878"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=41468"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=41468"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=41468"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}