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DesignCrowd grabs $3M to challenge 99designs in the U.S.

DesignCrowd just nabbed $3 million from Starfish Ventures

Above: DesignCrowd just nabbed $3 million from Starfish Ventures

Image Credit: Photo Illustration: Eric Blattberg

Apparently, Australia is the place to bootstrap a crowdsourced design service.

The country was home base for DesignCrowd and 99designs, two online marketplaces for graphic designers. But both companies have global ambitions.

99designs moved its headquarters to San Francisco in 2010, and now Sydney-based DesignCrowd wants to open up shop in the U.S., too — and it just snagged another $3 million from Starfish Ventures to continue its international expansion.

DesignCrowd differentiates itself from other online marketplaces like 99designs, Fiverr, and oDesk by offering participation payments to top designers (in addition to a lump sum for the winner of a competition). DesignCrowd has paid out over $1 million in participation payments, a company representative told VentureBeat.

In total, DesignCrowd has paid $12.5 million to its 100,000-strong community, growing revenues by 500 percent since late 2011. It doesn’t quite rival the more than $60 million 99designs has paid out across its contests, but DesignCrowd’s CEO thinks he runs a fairer service.

“While DesignCrowd is not the only design crowdsourcing service, we believe we are the best,” the company’s founder and CEO, Alec Lynch, told VentureBeat. “Since we launched in 2008, over 40 other crowdsourcing competitors have launched, and we’ve grown faster by continually improving the design crowdsourcing model to make it fairer and more lucrative for designers and, in turn, better for customers.”

The U.S. market has become DesignCrowd’s biggest sources of sales, despite its current lack of an American office. The company plans to establish a U.S. office and build out the team over the next year.

DesignCrowd currently has 20 employees. It raised an earlier $3 million funding round from Starfish Ventures in late 2011.