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Pinterest is just a jumping off point for this decorating startup

Leura Fine launched design site Laurel & Wolf from her kitchen in 2014 and in just over a year, it went from concept to company. The virtual interior design startup raised $25 million in Series A and B funding, ramped up its staff to 50 full-time employees, and counts over 800 interior designers in its network.

The growth surge, according to Fine, comes from the rising interest in interior design in recent years, including "inspiration sites" like Pinterest, Facebook's (FB) Instagram, and Houzz -- along with myriad design blogs, as well as HGTV, which has become the third-largest network in prime time and on weekends.

Aggregator retail websites like Wayfair (W), which came public at the end of 2014, and One King's Lane have also attracted increased investor interest from the DIY design boom. Fine says furniture sales are still not as high as they'd like to be because people don't have the confidence to buy. So her service is especially useful for helping people get through that process.

The creative bug has bitten millennials especially hard. We are witnessing a "maker movement" among 18- to 35-year-olds, according to Fine, with an increased level of interest in cooking, crafts and other creative outlets. Consumers have also caught onto the notion that space affects experience.

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Laurel & Wolf's slogan --"transforming the way people live, one space at a time"-- speaks to this, and the increased interest in the power of space has been reflected recently in the surge in popularity of Marie Kondo's "The Life Changing Magic of Tidying Up".

Fine's mission was to "democratize" interior design, which has traditionally only been offered to a wealthy few. It costs an average $35,000 to redecorate a room using a traditional designer. Laurel & Wolf, using its digital network, offers a professional interior designer for a fee of $299 to $499 per room.

Virtual design

The service is 100% virtual: You go to the site, add information about your space (upload photos, take dimensions, answer style preference questions), and set a budget. You then get custom submissions (style boards) from multiple designers in the network. You choose one and go through an iterative design process online together. When you're done, you get a fully executable design with a full floor plan, instructions about placement, a final style-board showing what it looks like, and a shopping list with all of the items that have been customized to your budget. From there, you can either go ahead and buy the items on your own or use the company's free buying service "Buy for me."

Laurel & Wolf generates revenue by keeping 20% of the flat design fee, and through affiliate revenue on online sales. The designers, which keep 80% of the flat fee, are vetted by Laurel & Wolf's team.

The company aims to be the go-to virtual site for interior design, as other start-ups in the space are cropping up, including Homepolish and Havenly.

Non-fluffy funding

During the earliest days of funding, Fine said that investors questioned how an interior design company could be considered "tech." But Laurel & Wolf garnered strong interest based on its attractive business model matching designers and clients with no inventory and no warehouses. "Marketplaces in the investor world are a bit sexy right now because you're able to match growing demand with an under-utilized supply side," Fine said, adding, “We’re truly a tech company in the fact that it’s our technology that allows us to scale.”