Redwood City, Calif.-based oDesk, an online workplace, announced Thursday that it's secured a $15 million Series D round of funding from T. Rowe Price, with participation from Benchmark Capital, Globespan Capital Partners and Sigma Partners. This brings the total round of funding to $44 million, since the company was founded in 2003.
In addition, oDesk said it's appointed Gregory Sanger as Chief Financial Officer, a sign this nine-year-old company may be teeing itself up for an initial public offering in the next couple years.
"We believe the marketplace for online work will reach over $1 billion this year," said Gary Swart, CEO of oDesk, in an interview with me. "This is growing aggressivley and it's only a fraction of what's spent on work." While no one has a good handle on what's spent in online work, the energetic and optimistic Swart believes the market could be larger than e-commerce.
To understand or grasp the magnitude of the market, one has to understand what online work is. Online work is any job that can be, well, conducted or at least monitored online, such as graphic desig or Web or software development. In fact, the majority, or 65% to be more accurate, of the work conducted over the oDesk platform is IT related, said Swart.
"Contractors are earning more than $300 million on oDesk a year," said Swart, adding that "more than 120,000 jobs were posted on the platform in February alone."
At the moment, there are 1.6 million contractors on the platform and more than 300,000 customers, with the highest concentration coming from small- to medium-sized companies. The average assignment is between $6,000 and $7,000, with the average job span lasting several months. While IT-related jobs are th most popular, the type of jobs for hire is expanding. For instance, some people are starting to use oDesk for language translation work, marketing and management.
Unlike a marketplace, where employers post a job and are connected with workers, oDesk is the platform upon which the work is conducted. This allows the employer to make sure that the worker is really doing the work. The worker earns money by the hour and not by the completion of a project. Essentially, the workplace platform creates an environment where it feels like the worker is sitting right next to you in a cubicle, Swart explained. ODesk also manages the 1099 forms and other work-related items that are typically a pain to deal with. For all this support, oDesk receives a 10% cut of the payments made.
Swart wouldn't get into the revenue figures, but he did say that growth in 2012 will come from three areas: 1) expanding the customer size to large enterprises 2) expanding the type of jobs that can be done online 3) expand the services overseas.
With this three-prong growth initiative, Swart believes a public-market debut is not out of the question. When asked if oDesk compare itself to the older-line job sites that went public in the past, like Monster.com, Swart said that he saw oDesk being more akin to LinkedIn, since they both connect companies with talent.
"We think this is a massive opportunity," said Swart. "This could and should be bigger than e-commerce... and we think it’s [oDesk] big enough to be a publicly-traded company."
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