Last Updated: 24 July 2026
Paper has raised $34 million in a Series A round. The startup is building a design tool meant for a specific moment: one where designers and AI agents work on the same software together. Stephen Haney founded the company to serve design teams that are increasingly working alongside AI coding agents in their daily workflow.
Design work hasn't kept pace with how fast AI has changed engineering. That's the gap Paper is trying to close. According to the State of AI Design 2026 report, 91% of designers now use AI for design tasks at least weekly, up sharply from 54% just a year earlier. The average design toolstack has also more than doubled in size over that period. Engineering teams can now generate working interfaces in hours using coding agents. Designers, meanwhile, are often still working inside canvases that were never built to talk to that code. Paper argues this mismatch is exactly where the next generation of design tools needs to focus.
Accel and ICONIQ led the round. Other participants include Designer Fund, WorkOS founder Michael Grinich, Lovable founder Anton Osika, and engineers and designers from Anthropic and OpenAI.
The timing lines up with broader market numbers. The AI-powered design tools sector was valued at roughly $8.22 billion in 2026 and is projected to grow to $18.16 billion by 2030, a compound annual growth rate of 21.9%. Much of that growth is coming from tools built specifically for AI-native workflows, rather than older design software with AI features added on top.
Paper's technical approach is one reason it caught investor attention. Most design tools rely on a proprietary canvas format. Paper does something different: it renders designs directly in HTML and CSS, the same code that runs on the web. That means a design made in Paper can connect straight to production code, and to the AI agents that increasingly write that code. It removes a step that has traditionally slowed down the handoff between designers and engineers.
"Paper is defining a new category with a fundamentally new approach to design software. Most design tools were built for a world where humans did all the work. Paper is built for a world where humans and AI create together, and is already seeing strong adoption among some of the world's most influential technology companies."
Dan Levine, Partner, Accel
The company says it will use the money to speed up product development, grow its team, and expand its work on AI-native workflows built specifically for designers. That plan reflects a broader bet. Rather than treating AI as a feature bolted onto existing tools, Paper is building its roadmap around the assumption that designers and AI agents will work side by side from here on.
Its recent growth gives that bet some weight. Paper's annual recurring revenue has grown 25 times over since it launched Paper Desktop in early 2026. The company has also appeared on Ramp's list of fastest-growing companies for four straight months.
"The line between design and engineering is blurring, elevating the importance of taste. We believe Paper is the first canvas built for where software is going, and some of the most quality-obsessed teams we know are pulling it in from all directions. That kind of organic word of mouth is rare."
Mariano Payano, Partner, ICONIQ
Stephen Haney founded Paper and launched Paper Desktop in early 2026. The product turned what used to be a static design file into a shared, real-time workspace for designers and AI agents alike. In plain terms, a designer and an AI system can now work on the same interface at the same time. That replaces the old back and forth of passing files between design and engineering.
Paper's use of HTML and CSS is central to how it works. Because designs are built in the same code that ends up in production, a design made in Paper isn't just a mockup that engineers have to rebuild from scratch. It can move much closer to finished code from the very start.
"AI changes everything, including design tools. Paper was born at the perfect time to leverage intelligence on demand, which creative people can influence and channel to design the next big thing."
Guillermo Rauch, CEO of Vercel
The round brought together a mix of institutional and individual investors. Accel and ICONIQ led it, joined by Designer Fund, along with individual backers Michael Grinich of WorkOS and Anton Osika of Lovable. Engineers and designers from Anthropic and OpenAI also took part, a detail that reflects how closely Paper's product is tied to the same AI systems shaping its customers' work.
Paper already counts Ramp, Lovable, Vercel, PostHog, Quartr, and Y Combinator among its users. Combined with fresh funding from two established investors, that customer base gives Paper the resources to grow its team and keep building for design teams working alongside AI agents.
