99designs deal will raise profile of start-ups: Pollenizer

The deal between Melbourne tech start-up 99designs and US venture capital firm Accel Partners will help to raise the profile of Australia’s “hot” start-up scene, according to tech seed fund Pollenizer.

Crowdsourcing design service 99designs recently received $35 million in funding from Accel Partners and a group of prominent angel investors, including Flickr co-founder Stewart Butterfield.

99designs, which was spun out of Mark Harbottle’s design and development hub Sitepoint in February 2008, is one of the pioneers of the rapidly-growing crowdsourcing sector.

The site allows users to access cheap design services by running contests, where designers from around the world bid to work on tasks set by users.

The company has more than 100,000 developers across 192 counties, and has paid $19 million to designers in the past three years.

Harbottle says he first met with Accel, which has also invested in Australian tech firms Atlassian Software and OzForex, in late 2009.

“Everything is becoming digital and it all needs to be designed. I think that’s what Accel saw as well – they saw us as the leader in a fast-growing sector,” Harbottle says.

“It’s definitely a big deal for us but it’s also a big deal on the Australian stage.”

Pollenizer co-founder Mick Liubinskas agrees with Harbottle, stating venture capitalists are increasingly looking to Australia for the next phase of growth, particularly as economic power starts to shift from the United States to Asia.

“There is a big opportunity for Australian companies to be the gateway into Asia… Companies like Accel are very keen on Australia because it is seen as a fast-growing industry that can produce global winners,” he says.

Liubinskas says the success of 99designs confirms his theory that more start-ups are choosing to test and launch their business from Australia and then go global, rather than relying on Silicon Valley.

With regard to the tech sector, Liubinskas says Australia is only “scratching the service” around eCommerce.

“Accel is not looking for pie-in-the-sky dreams – they just want something that makes money, fast,” he says.

Accel partner Ryan Sweeney told SmartCompany last year the firm is becoming “much more global in nature”, which means potential investments must have an international scope.

Sweeney said Australia’s strong economy means Accel is seeing lots of interesting growth types and opportunities.

“There’s a very good entrepreneurial spirit in Australia, and we want to see them build world-wide leading businesses. I think there is a really good sense of things over there,” he said.