Arcade, a generative AI marketplace that allows users to design jewelry, is expanding its offerings to include home goods, starting with rugs. The company announced the expansion on Monday, along with a new feature called "Match My Room," which enables users to upload a photo of their room to ensure their design complements the existing colors and style.

The "Match My Room" feature is a significant addition to Arcade's platform, as it allows users to upload a photo of their space, and the AI analyzes the color matching, ensuring the rug's color accents tie in with other furniture. Although the AI cannot successfully replicate patterns from other decor items in the image, such as pillows and blankets, the feature is a useful tool for users.

In conjunction with the expansion, Arcade announced a $25 million Series A funding round, bringing the total amount raised to $42 million. The new capital will be allocated toward hiring, platform development, and introducing new product categories, including ceramics and pillows. According to Arcade's website, chain belts are also next in line.

The rug creation tool leverages Midjourney and Stable Diffusion, similar to Arcade's jewelry design generator. Users select the rug material and then enter a text prompt to describe the desired design. Once the design is generated, it's then paired with a manufacturer, who will send the creator a free sample for approval before purchasing. Prices for the rugs start at around $400 for a 3x9 hand-tufted wool option, which is the most affordable material, and increase for higher-end materials such as cashmere, alpaca, and mohair.

Arcade claims to offer more affordable options than luxury rug retailers that charge thousands of dollars. The company has also introduced "Dream Boards," which function similarly to Pinterest boards, showcasing products with similar themes, such as Hollywood-inspired earrings. Users can browse other Dream Boards and make purchases, and the platform also has a seller program, allowing people to earn a 5% commission for each sale of their product.

The company has seen significant growth, with 650,000 jewelry designs generated since its beta launch in September 2024. However, Arcade did not disclose how many users are interested in purchasing these designs, nor has it revealed the commission earnings of sellers. The company's entrepreneur program, aimed at helping content creators unlock higher commission rates, has also been launched, with major media outlets and influencers encouraged to sign up.

Arcade is spearheaded by Mariam Naficy, who previously founded cosmetics retailer Eve and design marketplace Minted. The Series A round was led by Laura Chau (Canaan Partners), with participation from Kirsten Green (Forerunner). Other investors include Ashton Kutcher (Sound Ventures), Offline Ventures, and Reid Hoffman (LinkedIn co-founder), among others.

The expansion into home goods and the introduction of the "Match My Room" feature mark a significant milestone for Arcade, as it continues to leverage AI technology to revolutionize the design and purchasing process. With its new funding, the company is poised to further expand its product offerings and cement its position as a leader in the generative AI marketplace.