Deal focus: Square Peg supports LottieFiles’ push for scale

Motion graphics platform LottieFiles has been very deliberate in selecting investors. Seed capital came from corporate VC unit Adobe Fund for Design, given Adobe’s dominance of the design software space globally. M12, Microsoft’s venture arm, led a USD 9m Series A early last year, also with a view to securing key strategic players as investors as well as partners.

For its Series B, which closed last week on USD 37m, LottieFiles recognised that a different kind of lead investor was required for the next stage in its development. The company benefited from the halo effect and resources of strategic players in establishing product-market fit. Now the priority is achieving scale and it wants financial investors who have been there with other start-ups.

“We knew we needed the right operational partners, not necessarily strategic investors. We wanted one of the early investors in Canva [an Australia-based design and workplace collaboration platform valued at USD 40bn last year] and someone who had worn an operational hat. One name came up again and again – Square Peg Capital,” said Kshitij Minglani (pictured, left), CEO of LottieFiles.

Square Peg duly led the Series B. M12 and 500 Global re-upped, while XYZ Venture Capital and GreatPoint Ventures came in as new investors. XYZ is run by Ross Fubini, a Canaan Partners and Village Global alumnus. LottieFiles reasoned he could offer some Silicon Valley expertise to complement the Southeast Asia operational input.

Founded as recently as 2018, LottieFiles has grown rapidly and widely. On raising the Series A, it had 1m registered users across 40,000 corporate clients and 32 employees. Now, there are 3m users, 135,000 clients, and 115 staff. The company is US-based but the bulk of operations are in Asia, with bases in Malaysia, Singapore, South Korea, and India.

Its rise is linked to the proliferation of motion graphics on apps and websites. Lottie is an opensource file format for vectoral animation – a smaller alternative to animated GIFs that work on any platform and scale up and down without pixelation. LottieFiles.com is the most-visited Lottie destination globally, serving as a collaboration platform for designers and a repository of free-to-access graphics.

“Motion provokes emotion, it converts and engages the user on a whole different level. It tells the story you would have written in text format or created in a video,” said Minglani.

Collaboration engine

The LottieFiles customer roster features the likes of Google, TikTok, Disney, Uber, Airbnb, and Netflix. Typically, design teams create motion graphics on Adobe After Effects and upload them to LottieFiles.com to collaborate with colleagues on editing and ship the final product via Web iOS and Android platforms. A new animation goes through the LottieFiles workflow every nine seconds.

“Quantitatively, we are subconsciously wired to ignore static images. We get bombarded by thousands of them every hour. However, it is proven that certain movements grab attention. You do that through video or motion, and video is expensive to create,” said Nattu Adnan (pictured, right), CTO of LottieFiles.

“Open any app on the top app stores and you will find motion graphics, not a static image or a video, on the loading page. When you like a Tweet, a Lottie animation comes up. The heart that appears next to songs on Spotify is animated as a Lottie. Even the Windows 11 start button is a Lottie.”

LottieFiles maintains a library of 50,000 free and premium motion graphics that are available for general use. It essentially serves as a marketing device. The company’s core business is serving designers and design teams that use the platform privately. More than 4.4m icons, illustrations, 3D graphics, and Lottie animations are available to them for customisation and deployment.

“Creating motion graphics is very time consuming – at least 100 hours go into the more complex ones,” said Minglani. “We focus on the tooling behind collaboration and shipping animations, but we want to give designers the best value proposition and show them how design is done.”

At the same time, designers are not LottieFiles’ only target constituency. The user base is split 60-40 between designers, who prioritise editing and tooling functions, and developers, who care most about optimising the size of files that feature on apps and websites. "We are a rare combination of a designer and developer company,” Minglani added.

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• Topics
• Southeast Asia
• Technology
• Early-stage
• Media
• TMT
• Square Peg Capital
• M12
• 500 Startups