Even Before Figma Deal, Design Startup Funding Looked Good

Things are looking good for design startups these days.

Adobe’s $20 billion agreement to acquire collaborative design unicorn Figma is the latest proof that investors and buyers alike see tremendous value in the space. And while we probably won’t see another deal like this anytime soon, design continues to be seen as a hot sector for startup investing.

It’s not difficult to understand why. In a screen-addicted age, businesses and consumers are increasingly relying on tools that make navigating the digital world more intuitive and engaging. Much like good written and oral communication, the ability to craft persuasive content becomes part of essential job skills.

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A multitude of startups are claiming a leading role in this design-centric world. Using Crunchbase data, we’ve assembled a sample of 27 companies that have been funded over the last five quarters and have collectively raised over $1.8 billion to date:

When we compile such a broad industry list, we typically see a variety of different competing themes and strategies at the top of the ranking. This time, however, a single idea permeated much of the ranks. This is essentially the notion that everyone can and should have the skills and tools to put together nifty looking content.

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Startups that earned the most

This is the marketing pitch behind the most valuable company on our list: Sydney-based Canva, makers of tools for people without extensive graphic design experience to create compelling visual materials. Founded in 2013, Canva ranks as Australia’s most valuable unicorn, raising $573 million to date and peaking at $40 billion a year ago.

Canva claims more than 60 million monthly active users who use its software to create social media graphics, simple videos, presentations, and other visuals. Although the company’s valuation has reportedly fallen a bit since last year, it’s still the most prominent name among private venture-backed design startups.

Picsart, a Miami-based provider of video and photo editing tools and templates, is another heavily funded company on a mission to democratize design. It has raised $195 million in venture capital to date, including a $130 million SoftBank-led Series C in August 2021.

Founded in 2011, Picsart markets itself to content creators who do not have a professional design background. You can use its tools and templates to do things like change backgrounds of pictures, add text to photos, add stickers to pictures, and remove unwanted objects from pictures.

Other business models share more elements with Figma, a collaborative design platform that includes tools for brainstorming and prototyping. For example, Miro, which has raised $400 million in venture capital to date, is also focusing on visual collaboration through its online whiteboard. While Miro offers its offerings to design teams, it has a greater focus on other business functions, including marketing, engineering, and product management.

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Action in the early stages

There are also many early and mid-stage investments in design. Topics include animation and 3D design tools, and platforms that make it easier to find and hire talent.

On the animation front, LottieFiles stood out, a 4-year-old developer of simple animations that users can customize and insert into social media or online documents. The San Francisco-headquartered company closed one of its largest early-stage rounds — a $37 million Series B — in May.

A month earlier, Gravity Sketch, a 3D design platform, landed $29 million in a Series A led by Accel. The London-headquartered company makes a free app with sketching and modeling tools and a corporate product with enhanced security features.

When the do-it-yourself approach doesn’t work, startups also offer ways to find and hire talented designers more efficiently to complete projects. The most funded early-stage player in this space on our list is Superside, a design company that markets its services to corporate teams. The company raised a new $30 million in a Series A in December.

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Design enters the fast fashion age

Sometimes when looking at a list of funding rounds, the myriad business models converge to conjure up a picture of the future.

If I had to reach for an analogy for design, it would be something like the IKEA-ization of the online world. Decades ago, the model that brought IKEA to home decor allowed ordinary people on ordinary budgets to put together designer-inspired furniture and layouts that required little more than the patience of assembling things from flat boxes. Another analogy might be fast fashion, which nowadays allows anyone with some personal style to put together a runway-qualifying look on a budget.

In design we see a similar ethos emerging. This is the idea that anyone can create a trendy, professional-looking website, an ad-worthy presentation, or a sleek-looking clip to share on social media. While companies will still turn to professional designers and high-end tools for big-budget projects, we’re increasingly moving toward a world where even those of modest means can create some pretty enticing visual content.

Figure: Dom Guzman

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