Almost one year ago together with Alex we shared a deep dive about design tools. Since then quite a lot has happened in this space so I’ll share a quick update in this video with a list of the major fundraising and acquisitions that happened as well as three personal observations.
Funding Rounds
In terms of fundraising, the two biggest private startups of the sector have raised massive rounds. First Figma raised a 200M series E round last June and Canva has just announced a $200M round at a huge $40B valuation, making it one of the biggest private companies out there.
But the action was not limited to big companies, at every layer of our mapping companies have raised money. Vectornator, an easy to use illustration software has raised $20M. Uizard, the world’s first AI-powered digital design assistant for non-designers raised $15M. Anima a design to code automation tool has raised $10M. ZeroHeight, a DesignOps platform that provides a central place to document UX as well as design APIs to speed up UX delivery raised $10M.Â
And I will stop the list here as plenty more startups in that space have raised money.
Acquisitions
In terms of acquisition we’re still early in terms of market consolidation but two major acquisitions were frame.io for more than one billion $ by Adobe and Figma which acquired its first startup with Visly, a design tool for front end developers.
Three Observations
#1 A deeper market than I thought. As with many markets, I clearly underestimated how big the design tool space was: according to Techrcunhc “Canva expects to exceed $1 billion in annualized revenue by the end of 2021. More than 500,000 teams are paying for the product in some capacity.” And we’re speaking about one company only, so imagine for the overall market.
#2 The democratization of design asset creation. Whether you look at the B2B or B2C side there’s no doubt that the major trend shaping space is democratization. On the B2B side, as we’ve seen with Uizard or Vectornator the equivalent of no-code/low-code for design tools is growing like crazy and enables designers to create assets more easily. But it’s also true on some more prosumer products such as the Photoroom app which enables anyone to create professional looking pictures and currently grows at 100k users per day.Â
#3 The deployment of design infrastructure tools. Another aspect that stands out from the fundraising and acquisition I just listed is the emergence of a real design infrastructure layer. Whether it’s design system tools that I covered in more depth in previous videos or design to code tools, a growing number of products make the bridge between designers and developers. I believe that we’re still super early in this deployment phase, but increasingly companies will adopt such tools to lower the friction that exists between design and code.