Canvas leads $12.5M round in CrowdFlower

Riding the big data wave, CrowdFlower gathers humans to touch up what machines can't do

It's nice to know that the human touch is still needed in a world where robotics and artificial intelligence are gaining momentum. CrowdFlower, which has five million so-called on-demand contributors cleaning up data, has raised $12.5 million in a Series C round of financing, led by Canvas Venture Fund, with full pro rata participation from Bessemer Venture Partners and Trinity Ventures.

The new round brings the total amount raised to $28 million.

"We looked heavily into crowdsourcing," said Rebecca Lynn, Partner at Canvas Venture Fund (an off-shoot of Morgenthaler Ventures), who also joins CrowdFlower's board.  "CrowdFlower had the broadest platform in terms of use cases and a very impressive customer base. We followed them a few years [before investing]." 

Such is the style of Lynn, and her partners at the Canvas Venture Fund, who typically spend months or years watching a company and market segment, analyzing and evaluating which startup stands out. An investment from Canvas is a significant validation.

Vator has watched CrowdFlower for many years as well. Watch the interview with Lukas Biewald back in 2010, just months after the company launched. Back then, Biewald told me that CrowdFlower had some 200,000 users contributing vs five million today. Amazing. In the interview, you can hear what kind of tasks CrowdFlower works on as well as how the company gets paid.

It doesn't sound like the tasks are much different today. If anything, the tasks are far more sophisticated. 

Today, some of the companies CrowdFlower works with include eBay to VMWare to address many data projects such as image annotation, sentiment analysis and real-time transcription. 

So how did CrowdFlower catch the eye of Canvas? "They moved to a self-serve SaaS model," said Lynn. And the fact that the company hit certain revenue projections they sought to meet. "With no marketing dollars to get these customers, they proved their product-market fit."