Arcade Expands into Home Goods with AI-Designed Rugs and Raises $25M

Arcade, the generative AI marketplace known for its innovative jewelry design tools, is branching out into home goods, starting with rugs. On Monday, the company unveiled a new feature called “Match My Room,” allowing users to upload a photo of their space and generate rug designs that complement its colors and style.

This expansion comes alongside a successful $25 million Series A funding round, bringing Arcade’s total raised capital to $42 million. The round was led by Laura Chau from Canaan Partners, with participation from Kirsten Green of Forerunner.

Arcade’s rug design tool uses AI models like Midjourney and Stable Diffusion to bring users’ creative visions to life. Customers choose their preferred rug material and describe their desired design using a text prompt. Once the AI generates the design, it’s sent to a manufacturer who provides a free sample for approval before purchase.

Pricing starts at approximately $400 for a 3x9 hand-tufted wool rug, with costs increasing for premium materials like cashmere, alpaca, and mohair. Despite these upscale options, Arcade positions itself as a more affordable alternative to luxury rug retailers.

The “Match My Room” feature ensures harmonious color coordination, though it may struggle with replicating intricate patterns from other décor items like pillows or blankets. Still, it’s a helpful tool for users seeking a cohesive design.

For those who love exploring and curating designs, Arcade offers “Dream Boards,” similar to Pinterest, where users can organize and share theme-based collections. Popular categories include styles inspired by Hollywood and contemporary design. Users can browse, get inspired, or purchase directly from these boards.

Arcade also provides earning opportunities through its seller and affiliate programs. Sellers can now earn a 5% commission per sale, up from the previous 2.5%, while influencers and creators can unlock higher commissions by joining the company’s new entrepreneur program. Those with over 25,000 followers are encouraged to apply by contacting Arcade’s marketing team.

Since its jewelry design beta launched in September 2024, Arcade has generated 650,000 designs. While the company has yet to disclose specific sales figures or seller earnings, the rapid design adoption hints at strong user engagement.

Founded by Mariam Naficy, the creator of Minted and cosmetics retailer Eve, Arcade plans to use the new funding for hiring, platform development, and expanding its product catalog. Upcoming categories may include ceramics, pillows, apparel, leather goods, and even chain belts, according to the company's website.

With the support of notable investors like Ashton Kutcher (Sound Ventures), Reid Hoffman (LinkedIn co-founder), and David Luan (CEO of Adept AI Labs), Arcade is poised to redefine how consumers design and personalize their spaces using AI.