99Designs Gets $35M, Should Spend Some Of It and Buy Logo.com
A friend of a friend emailed me a press release announcing that 99Designs, a popular logo and web design company, just received a $35 million investment from Accel Partners and other angel investment firms. Wow… that’s a lot of money, especially when it didn’t seem to me like they had funding needs.
So what will 99Designs do with this very large investment? I would imagine they will spend some of the money on marketing the brand. Another suggestion from the TechCrunch article covering the news was that the company might be interested in acquiring a smaller competitor. The logo design space is crowded, and acquiring another company might be a smart way to grow.
My personal suggestion would be to reach out to the team at Logo.com and see if there’s any chance of an acquisition. Since this is a very recently launched website that will likely become a thorn in the side of 99Designs, the revenue is probably light and it will be cheaper now than if the site is a big success. Not only would this type of acquisition eliminate a potential competitor, but it would also allow them to grab a great domain name that is memorable and likely good for SEO.
Of course 99Designs doesn’t need to buy Logo.com, but now is the time that this company is obtainable at its cheapest (in my opinion).
I have no idea what it would take to buy Logo.com, and I can’t speculate on whether Logo.com would be interested in selling at this early stage in their history, but now seems like a good time to get a deal done.
** Disclaimer: One of the principals of Logo.com is a good friend, although I don’t know if the company would be for sale. However, if the company is anything like mine, everything is for sale for a price.
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