99designs has paid out $150M to freelance designers

Gig marketplace allows graphic designers to compete in "contests" to earn extra cash

Editor's Note: David Kaplan (CFO at 99designs) will be speaking at next week’s SplashX, a networking event for startups and investors. Interested in attending? Register here.

Marketplaces for on-demand work are a dime a dozen these days, but there’s one thing that’s rarely very clear: how much money are the workers making through these marketplaces?

99designs, an online marketplace of freelance designers, today announced that it has paid out more than $150 million to its users throughout the world. The company now averages about $3.5 million in monthly payouts to its designers.

Started in 2008, 99designs has committed itself to giving businesses and individuals a dead simple way to connect with designers online. While other gig networks—like Fiverr and Upwork—have taken a very broad approach by allowing everything from graphic design work to programming and beyond, 99designs is specifically focused on design. Within that category, it has gone deep, offering services from tens of thousands of designers on logos, web design, advertising, merchandise, art, packaging, and more.

Like another marketplace for work I wrote about earlier this week, 99designs doesn’t just let freelancers bid directly on design projects for clients. Rather, the client pays a lump sum, a bunch of different designers create their own projects abiding by the client’s requests, and then the client picks the winning design. Only the winning designer gets paid for their work (through credits that can be cashed out), which has led other designers to complain about the model because it essentially encourages “spec work,” or free “sample” work, without any guarantee of payment.

But that hasn't stopped the company from ballooning in popularity. 99designs says its designers have done work for more than 350,000 customers across more than 750,000 design projects over the past eight years. Though projects on 99designs range in price from around $200 to the thousands, a little rough math ($150 million paid out to designers divided by 750,000 design projects) suggests that the average designer gets paid about $200 for a project.

99designs says the average designer on the site has more than 10 years of experience. And it also claims that more than half of earning designers on the site earn twice the median income of their home country.

"Design is shaping future careers and the next generation of business across the globe and we are pleased to be playing a part in this phenomenon. Our unique combination of education and competition has accelerated the careers of designers all over the world," said Patrick Llewellyn, CEO and President of 99designs, in a prepared statement. "Education and ongoing access to work is central to what we do at 99designs and key to helping us achieve our vision of owning design online."

Based in Oakland, 99designs has raised a total of $45 million in venture capital in two rounds, one led by Recruit Strategic Partners (the Silicon Valley-based VC arm of Japan’s Recruit Holdings Co., Ltd) and the other by Accel. In its Series A, the company also received strategic backing from various angel investors, including Michael Dearing (former SVP at eBay), Stewart Butterfield (co-founder and CEO of Slack), Dave Goldberg (former CEO of SurveyMonkey), and Anthony Casalena (founder and CEO of Squarespace).