Online crowdsourcing start-up DesignCrowd has acquired Texan company Brandstack for an undisclosed sum, combining the service with its existing community to launch BrandCrowd.
DesignCrowd is an online marketplace providing logo, website, print and graphic design services by giving buyers access to a “virtual team” of freelance graphic designers and design studios.
It was founded by Alec Lynch in January 2008, making it four months older than Brandstack, and recently secured a $3 million investment from Starfish Ventures, based in Melbourne.
According to Lynch, the acquisition of Brandstack – and the subsequent launch of BrandCrowd – will further reinforce DesignCrowd’s leadership in crowdsourced graphic design services. Brandstack, founded by Wes Wilson and based in Texas, is an online marketplace providing ready-made brands and logos for sale to buyers around the world.
Brandstack lets graphic designers create their own studios and sell design work to their peers or directly to buyers, changing the way in which designers reach their customers and network.
“Brandstack has been the leader in ready-made brands for a number of years. Previously, we’d admired them from afar and considered them technically a competitor,” Lynch says.
“We’d been planning to enter that space and begin competing with them. Their model links very closely to what we do at DesignCrowd.”
In November, Brandstack announced it was shutting down after running into financial trouble. Lynch saw an opportunity and pounced.
“I was in contact with them once I heard that announcement and we commenced negotiations. They were really open [about an acquisition] from the beginning,” he says.
Lynch points out the deal is an asset acquisition, which means the Brandstack team will not be joining DesignCrowd. Since its launch, the Brandstack team has diminished from five to two.
“We may talk to the existing staff… I think there would be some value in that but we haven’t brought anyone on,” Lynch says.
However, DesignCrowd has wasted no time in launching BrandCrowd.com, which will combine the Brandstack service with the existing DesignCrowd community. Designers can work across both websites but, in the New Year, the company will look at integrating the sites more closely.
“Acquiring Brandstack will help DesignCrowd do three things – achieve immediate, global market leadership in the ready-made logo design space, grow our existing business in the US, UK and Canada, and help unlock the value of our 500,000 unused designs submitted on DesignCrowd,” Lynch says. “That’s why we bought it. Brandstack was the best ready-made logo marketplace.”
Wilson says Lynch and his team have “incredible passion” for the design community, expressing his happiness that Brandstack can play a part in their plans.
Amazingly, DesignCrowd didn’t fly to the US to finalise the deal, completing the entire process digitally, including due diligence, “with the help of different applications and softwares”.
Lynch insists the acquisition of a US company was “an added bonus” rather than a strategic move, although he welcomes Brandstack’s existing client base in both the US and Canada.
“Part of our plan is to scale the existing business internationally, especially in large markets like the US, UK and Canada. We would like to open an office in the US in the New Year,” he says.
This article first appeared on StartupSmart
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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