SAN FRANCISCO, Oct 30 (Reuters) — Minted, an online marketplace for stationery and art, has raised $38 million in new financing as it taps into consumer demand for small-batch, high-participation manufacturing, it said Thursday.
The money will help Minted expand into textiles and set up a new system where popular designers on the site can create their own storefronts within the larger Minted site.
“This is a stepping stone for us into home design,” said company founder and chief executive Mariam Naficy, adding the company may eventually sell items such as shower curtains and linens, or perhaps even clothing.
Minted draws heavily on crowdsourcing, with designs typically originating from contest submissions from individual hobbyists and professionals. Then visitors to the site can make suggestions and vote on the entries. Based on community input and algorithms, Minted then selects the winning designs and manufactures them.
Enthusiasm for crowd-sourced designs has given rise to growing numbers of businesses. Companies such as San Francisco-based 99designs, Chicago-based crowdSpring, and Sydney, Australia-based DesignCrowd allow other businesses to crowd-source the design of their logos and websites, for example.
Wednesday, community message board and news site Reddit said it would open a new crowdfunding service, Redditmade, that helps users design and sell customized products such as T-shirts.
The trend plays to the rise of the Maker Movement, which seeks to make manufacturing more democratic and has inspired a wave of do-it-yourself tinkering.
Minted is also searching for a chief financial officer with public-markets experience, Naficy said in an interview. While that normally indicates a startup is contemplating an initial public offering, Naficy said an IPO was probably 2-3 years away.
While most promising start-up companies raise larger amounts with each funding round, Minted is raising $3 million less than its previous financing, a $41 million round a year ago.
That is in part because the company raised more “primary” cash, or funds that go directly to the business, said Woody Harrelson, an investor at Technology Crossover Ventures. In its last round, Minted raised more “secondary” cash, meaning funds that go to buy out existing shareholders.
This year, about 150 U.S. startups raised less money in a funding round compared with their prior funding round, according to consultancy CB Insights. Close to 600 raised more money.
Norwest Venture Partners led Minted’s new funding round, with participation from Technology Crossover Ventures. The amount may grow to $40 million, Naficy said.