Paper Raises $34M Series A From Accel and ICONIQ to Build Design Tools for the Agent Era

The rise of AI coding agents has upended the economics of building software — and now it is redrawing the design tool market. Paper, a startup building what it calls a design platform for the agentic era, announced a $34 million Series A co-led by Accel and ICONIQ last week, bringing its total funding to $38.5 million.

The round, announced July 23, drew a strikingly operator-heavy syndicate: Designer Fund, WorkOS chief executive Michael Grinich, Lovable chief executive Anton Osika, and individual engineers and designers from Anthropic and OpenAI joined, alongside returning investors Basecase and David Hoang, according to the company's announcement.

Designing in the medium of the web

Paper's core wager, laid out by founder and chief executive Stephen Haney, is architectural. Where incumbent design tools render to their own proprietary canvas formats, Paper uses HTML and CSS as its rendering engine — meaning what designers manipulate on its infinite canvas is the same material that ships to production. That choice makes the platform legible to AI coding agents, which can read, generate and modify web code natively but struggle with opaque design file formats.

The result is a workflow in which human designers and coding agents collaborate on the same artifact. "Paper brings our production codebase into an infinite canvas for our design process," said Nad Chishtie, head of design at Lovable, in the announcement. Vercel chief executive Guillermo Rauch added that he has "seen very few tools get the kind of love and organic adoption by industry leaders like Paper has had."

25x growth and a nervous incumbent

The traction numbers are the reason two blue-chip firms co-led a $34 million Series A for a company with $4.5 million raised previously. Paper says annual recurring revenue grew 25x in the month following the launch of Paper Desktop, and the company has ranked near the top of Ramp's fastest-growing companies list for four consecutive months — including multiple stints at number one. Thousands of teams now pay for the product, among them Ramp, Lovable and legal AI unicorn Harvey.

The competitive subtext is hard to miss. Figma, the category's public incumbent, has seen its market value roughly halve as investors question whether traditional design tools survive a world where agents write most front-end code — the exact thesis Paper raised on, as Startup Fortune put it. Adobe's struggles to articulate an agent story have only sharpened the opening for a new entrant built AI-native from the first commit.

What comes next

Paper says the new capital will go toward accelerating product development, expanding the team, and building what it calls agent-scale infrastructure — the backend needed when the majority of "users" hitting a design file are autonomous software rather than people. The company also plans to push beyond core design teams into the broader product organizations that increasingly ship software through agent workflows, while continuing its open-source contributions.

The category question is whether design converges into the coding-agent platforms themselves — Lovable and its peers bundling design as a feature — or whether a dedicated canvas built on web-native primitives becomes the neutral layer everyone plugs into. Paper's investor list, which pointedly includes Lovable's own chief executive, suggests the ecosystem is hedging toward the latter.