Melbourne startup 99designs is being acquired by global printing giant Vistaprint, putting an end to the online design marketplace’s mooted plans to list on the Australian Securities Exchange.
Founded in 2008 by Matt Mickiewicz and Mark Harbottle, 99designs was one of a pioneering crop of Australian startups that put the local technology sector on the map.
The company, backed by Silicon Valley heavyweight Accel Partners, relocated its headquarters from the US back to Melbourne in 2017 to set the scene for a possible IPO. It recorded revenue of $60 million in 2018 and has been profitable for the last few years.
The terms of the sale were not disclosed. However, 99designs chief executive Patrick Llewellyn said selling the business to Vistaprint, owned by the $US2 billion NASDAQ-listed conglomerate Cimpress, offered the best path forward for the business.
“We just weren’t ready to go public on our own in 2020,” he said. “We certainly could have raised capital in this market but this allows us to move a lot faster and really focus on the things that we care about.”
Mr Llewellyn, who joined 99designs in 2009, said the business will be able to grow faster under the new ownership, with plans to hire 30 more staff in Melbourne and launch new offerings aimed at small businesses.
“Change always comes with a little bit of of the unknown if you know what I mean there’s sort of a little trepidation there but it is ultimately one where we get access to 20 million customers,” he said.
“We get access to a very complimentary vision around what we want to build together. It’s a vote of confidence in the local tech scene the fact that we’re going to be aggressively hiring in this market and continuing to build out our capabilities here.”
Cimpress and Vistaprint founder and chief executive Robert Keane said while there were a lot of freelance sites out there the trust 99designs had built up with designers on its network was a valuable asset.
“When we talk to our customers they really want experts who can help them look great and to do that you have to have graphic designers who are engaged and see this as a real positive,” he said.
He said the coronavirus pandemic had been tough for Vistaprint’s mainly small business customer base but the company was intentionally investing through the period to be in a strong position on the other side.
Mr Keane, who started Vistaprint from his bedroom in Paris 25 years ago, added that buying 99designs fits his ethos using acquisitions to “inject the DNA of startups” into Vistaprint.
“Maybe it’s my own personal fears about becoming a big business and as soon as we start thinking big we will start getting smaller.” “
“If we keep thinking small, we’ll get bigger, so I’m excited to have 99designs inject that.”
Source: Thanks smh.com