Press Release
January 26th, 2012 § Leave a Comment
DesignCrowd Launches 100% Australian Crowdsourcing Service
25 Jan 2012 – Crowdsourcing startup DesignCrowd has launched an Australian-only crowdsourcing service to help businesses crowdsource only to Australian designers
International crowdsourcing marketplace DesignCrowd – who previously specialised in helping businesses outsource or ‘crowdsource’ to designers around the world – has launched a new Australian-only country-specific crowdsourcing service. The new website – DesignCrowd.com.au – will allow Australian businesses to crowdsource designs exclusively from Aussie designers.
This innovation is unique among existing creative crowdsourcing services and offers Australian businesses the opportunity to only engage local design talent, supporting the local industry and combining the benefits of crowdsourcing with the benefits of local designers. The new website which was launched in response to customer demand to limit projects to their favourite Australian designers will also offer Australian currency, local customer service and favourite a directory of top Australian designers – important features for small business owners who are heavy users of the platform.
It’s estimated that the local design industry is worth at least $4B annually. Australian design agencies employ 11,000 designers full-time while DesignCrowd already has 60,000 designers registered on its site. The company hopes to recruit more local design talent to its ranks and is offering local design agencies a white-labelled crowdsourcing platform.
DesignCrowd CEO Alec Lynch said, “Australians have been early adopters and heavy users of crowdsourcing but they also like to support local industry. Our new service will let Aussie businesses combine the benefit of crowdsourcing with the talent of the Australian design community. Clients in Sydney will be able to post a project on DesignCrowd and get 50-plus designs from designers in Melbourne to Mackay. If they want to they can also get designs from designers in places like Mumbai and Miami.”
DesignCrowd’s new Australian-focussed service further enhances Australia’s reputation as a leader in crowdsourcing. Ross Dawson, author of Getting Results from Crowds, said “Crowdsourcing will be central to Australia’s future. The growth of Australia as a global crowdsourcing hub demonstrates that we see the opportunity and are actively engaged in the reality of a world of connected work. It is exciting to see innovations such as DesignCrowd’s expand opportunities for Australian businesses and put Australia on the forefront of the global crowdsourcing landscape.”
The launch of the Australian service coincides with the appointment of Google Docs pioneer Anthony Glenning to the DesignCrowd board and follows a busy 3-month period which has included $3M investment from Starfish Ventures, the acquisition of US business Brandstack and the launch of BrandCrowd.com.
Press Release BrandCrowd // DesignCrowd
Contact
Contact Alec Lynch, +61 412 370 537 Alec.Lynch@designcrowd.com
About DesignCrowd
Launched in January 2008, DesignCrowd is a leading online graphic design service marketplace for design contest, logo contest and graphic design outsourcing services. The platform enables buyers to post a logo, website, print or graphic design project on the DesignCrowd network and select their favourite design of hundreds received from designers around the world. Watch DesignCrowd’s “How It Works” video.
DesignCrowd’s multi-million dollar business spans 159 countries and 60,000 designers and is headquartered in Sydney. In 2011, DesignCrowd received a $3M of investment from Starfish Ventures.
About BrandCrowd
BrandCrowd (formerly Brandstack) was launched in April 2008 and is the world‟s largest marketplace for ready-made brands and logo designs. BrandCrowd helps logo designers monetize their unused logo designs, brands and domains. BrandCrowd is owned by DesignCrowd.
DesignCrowd // BrandCrowd Contact
Chris McNamara, chris.mcnamara@designcrowd.com
Ph: +61 402 945 323
Download this Press Release in PDF
Press Release: Starfish Ventures invest $3M in Aussie start-up DesignCrowd
November 3rd, 2011 § 1 Comment
3 Nov 2011 – Australian based Internet start-up DesignCrowd has received a $3M investment from leading Australian venture capital firm Starfish Ventures
DesignCrowd.com – an online marketplace that helps businesses around the world outsource or „crowdsource‟ creative projects – has received a $3M venture capital investment from Melbourne based Starfish Ventures.
DesignCrowd, which was founded in 2007 by Alec Lynch at the age of 23 from his “mother‟s dining room table”, is now a multi-million dollar business with users/clients spanning 159 countries. DesignCrowd‟s disruptive crowdsourcing business model has helped it grow internationally and attract clients like Harvard Business School (who received 267 logo designs from 57 designers when they „crowdsourced‟ their Forum for Innovation and Growth logo via DesignCrowd). DesignCrowd already has 40,000 registered graphic designers from around the world (four times more than the 10,000 designers employed in design studios in Australia).
Founder and CEO Alec Lynch said, “Starfish‟s investment is very exciting – it will help us grow from a bootstrapped Sydney start-up into a global company. We‟ve done well in Australia, now we want to take on the world and Starfish is the perfect partner to help us succeed.”
Tony Glenning of Starfish Ventures (who led the investment in DesignCrowd) said, “We really believe in the crowdsourcing model. In particular, we are really attracted to the idea of crowdsourcing the solution, rather than simply providing a marketplace for outsourcing, which ends up as a race to the bottom and is neither beneficial to the customer nor the designer. Alec and his team have done a great job providing a unique offering that serves both.”
Starfish‟s investment in DesignCrowd is particularly noteworthy given the current economic climate. It is the second time DesignCrowd, which launched during the „global financial crisis‟, has raised capital during an economic downturn. In 2009, Lynch received $0.3M of investment from „angel‟ investors and the business has since grown more than 1300% – highlighting the strength of DesignCrowd‟s model and team.
DesignCrowd plans to use the investment to grow its client base in markets outside Australia (particularly in the US) and to launch two new services in 2012. In the short term, DesignCrowd plans to hire aggressively and Lynch says “We‟re looking to hire ten people by January and we need a Chief Operating Officer immediately to help us handle the growth and implement our plans.”
Contact
Alec Lynch, +61 412 370 537, alec.lynch@designcrowd.com
About Starfish Ventures
Established in 2001, Starfish Ventures is an Australian owned venture capital fund manager seeking superior returns through active investment in innovative technology companies. Starfish Ventures has over $385 million in funds under management and has made investments in over 40 companies to date. Starfish Ventures seeks investments in emerging Australian businesses across all technologies sectors including information and communications technology, biotechnology and life sciences, industrial technology, and cleantech. For more information go to www.starfishvc.com
For further information:
Katya Baxter
Communication Manager, Starfish Ventures, Ph: 03 9654 2121
Smart Answer for StartupSmart Entrepreneurs
October 18th, 2011 § Leave a Comment
Q. Is there any money for businesses in sectors such as retail or manufacturing? Or are these industries toast?
Investment Director - Tony Glenning
A. It is true that the vast majority of venture capital funding is invested in tech businesses, but not all.
Starfish Ventures specialises in tech investments, including technology driven retail and manufacturing sectors, so we do not have the insight on VC investments into other traditional business sectors.
However, we can offer an explanation why the majority of funds are invested in to tech businesses.
Venture capitalists prefer to invest in “entrepreneurial businesses”.
Regardless of their size it is more about potential for growth. As a general rule, unless a business can offer the prospect of significant turnover and capital growth within five years, it is unlikely to be of interest to a venture capital firm.
Venture capital firms are fund managers for institutional investors such as superannuation funds.
The institutional investors are interested in seeing a return on investment which is better than the return on an alternative investment.
Technology businesses have historically been the higher growth sectors than retail or manufacturing, so institutional investors are less likely to want to invest in these areas.
Just looking at the BRW Young Rich and Fastest Growing Companies lists, it’s clear that it is the technology companies who are defying the gloomy results and forecasts of other sectors, making it the obvious choice for the investor dollar.
Yes, the tech sector has traditionally received a large portion of investments – web technology, business software, energy efficiency, semi-conductors, etc.
However, there have been tech-based investments in the retail and manufacturing industry in Australia.
To clarify, VC does not invest directly in retail chains like PE investments in Witchery or Myer.
Rather, VC has invested in technology that are found within the retail space and manufacturing space.
Dealised, Our Deal, and travel.com.au are examples of investments in the retail space. Another example is the Starfish Ventures investment in Zoom Systems which is a retail platform provider.
There have also been VC investments in industrials and manufacturing.
Starfish Venture portfolio company MIGfast produces a consumable MIG welding contact tip that offers a quantum change in welding speed.
Traditional bricks and mortar retail and manufacturing will never be toast, they are just going through a transition period that is forcing them to adopt more efficient models and are forcing out businesses that do not make the necessary adjustments.
At the end of the day, people will still need cars, furniture, food, and clothing. Entrepreneurs looking to get into these industries should look at sources of funding from angel investors, incubators, family and friends, and of course banks are an option.
This question was answered in consultation with Australian Private Equity and Venture Capital Association (AVCAL).
Australian technology companies’ success in the US
September 29th, 2011 § Leave a Comment
Starfish Ventures portfolio companies make the Inc. 500:5000 fastest growing companies in America list (2011)
Every year, Inc. magazine awards the distinction of being named the gold standard of entrepreneurial success, only to the very best private firms in America. The ranking is based on revenue growth in the 4-year period from 2007-2010
In 2011, Innovative Retail and Health mobile communications provider, 5th Finger International is ranked #168. The PDF Software developer, Nitro PDF, is ranked # 699 (coming in at #57 in the Software Category and #27 for San Francisco based firms)
5th Finger International’s 2010 revenue was 2.6million which is a 1,752% growth over 3 years. (reference: http://www.inc.com/inc5000/list/2011)
In 2007, NITRO earned $1.6m, increasing to $9m in 2010.
About Nitro PDF
started in Australia in 1997 as ARTS PDF selling a range of Adobe Acrobat plugins. However over the years, Nitro came to the conclusion that they could deliver a better solution to Acrobat itself and at a more economical price point. In 2005, Nitro Professional was launched as the first true alternative to Adobe’s offering. On the back of their success, Nitro opened a US office in 2007 and has continued to grow ever since.
Starfish Ventures investment director and Nitro PDF director Anthony Glenning says “It is wonderful to see Australian start-up achieve such growth and recognition on an international stage. Australian firms have a market size disadvantage from the beginning, so to crack the market in the US and be recognised as one of the fastest growing US companies is a great credit to Nitro.”
About 5th Finger
5th Finger is one of Australia’s most recognised mobile marketing companies. Over the first half of the last decade the 5th Finger team grew a dominant business in the Australian mobile landscape, leading to the acquisition of the company by Ninemsn in 2006. In 2007 part of the team branched out and took the 5th Finger story to the USA, establishing a standalone business with the core technology and brand that had demonstrated such success in the Australian market. The company opened an office in San Francisco and is now a leading provider of mobile marketing technology and services to major brands, retailers and healthcare providers across North America.
Malcolm Thornton, Investment Director at Starfish and director of 5th Finger believes that “The commendable growth of these Australian firms as highlighted by Inc. 500:5000 is important example of the importance of VC investments in Australia. With the investment capital and support services Starfish could provide, the 5th Finger team were fully equipped to bring their market experience, standout technology and entrepreneurial enthusiasm to this major global market.”
For more information on Inc. 500|5000 - http://www.inc.com/inc5000/welcome
Ask a Venture Capitalist
July 29th, 2011 § Leave a Comment
Here at Starfish we like to demystify the world of venture capital, and are happy to answer questions.
Thanks to a question from Startup Smart, this week Investment Director Anthony Glenning sheds some light on:
Proof of Concept: What is? Why do you need it? And how to attain it?
Anthony Glenning
Each potential investor may have different questions in mind when they asked for a ‘proof of concept’ (POC), but I’ve asked for many POC’s and I can certainly tell you what I am thinking.
In a nutshell, having a POC is about risk mitigation. When an entrepreneur pitches an opportunity there are always a number of premises that underpin the rosy outcome. Premises are often in the areas of:
- technology (“once I develop cold fusion”),
- commercialization (“I just need to scale production to get the COGS down”),
- customer acquisition (“my existing users will tell 5 of their friends”)
- and/or business model (“I’ll use a SaaS model and charge by the month”).
Each premise generally constitutes a risk factor. The point of a POC is to reduce or eliminate the risk associated with the premise not actually being true.
And by risk, I mean risk as perceived by the investor. Everyone comes to the table with a different set of experiences and knowledge base. Someone with a good understanding of JavaScript and HTML5, may not be that concerned about the development of a 3D real-time visualization tool in the browser, but much more concerned about the market adoption of such a tool for house design by architects. However another person, may know of the burning need within architecture firms for collaboration around design, but have no idea whether such a thing is possible. They would each assess the risks around those premises differently.
When I ask for a POC, generally I am asking to see a demonstration of an aspect of the business to reduce my perceived risk around one or more premises. Most often a POC will centre on a technological risk. So for example, if your pitch was to start a business that would solve the world’s energy problems through a cold fusion reactor, then I might ask to see a POC around generating a small amount of energy from a cold fusion reaction, such that the energy input was less than the energy output. For me, I would be willing to accept the premises that (a) if you could show this, then there would be market demand for such a product, and (b) if it can be done on a small scale, then it can be done on a large scale.
But sometimes a POC might focus on the business model. For example, before Google it was not clear that if you offered advertising to the long tail of advertisers (those with an ad spend too small to justify a sales phone call, let alone a sales visit and therefore did not traditionally advertise), whether there was significant revenue there. There was! So now while people understand the long tail phenomena better, an investor might still ask for a POC that illustrates the value of the long tail for a given business in a particular sector. In this case the POC might be to run the business on a very small scale – say just within one suburb – and show the revenue potential justifies investing in growth.
To conclude, if a potential investor asks you to demonstrate a POC, then your first order of business is to ask what particular concerns that the investor has (if they haven’t already told you), and think of a POC or trial or pilot program that would mitigate that risk, including defining end points. For savvy investors, most will share the same concern, so a well constructed POC will be useful for all your fund-raising, and, you never know, you as the entrepreneur may learn something that improves your offering too!
