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ODesk and Elance combine their freelance marketplaces

New company will have eight million freelancers, and two million businesses, in over 180 countries

Financial trends and news by Steven Loeb
December 18, 2013 | Comments
Short URL: http://vator.tv/n/33da

As someone who studied film in college, and tried to get work in that field once I graduated, I know how difficult freelancing can be.

It is especially hard when you first start out, and you have few to no connections, and you have to call on anyone you even tangentially know to get work. In my case it was the boyfriend of the roommate of a friend of my sister's who worked at The Daily Show, and knew of an opening at another show that he got me some work on. 

The freelance market is a big one, though, and numerous companies have emerged to help eager workers get their foot in the door. Now, two of the biggest websites dedicated to helping freelancers find work, oDesk and Elance, are coming together and combining forces to create one big super company, it was announced on Wednesday.

By merging, the new company, whose name will be announced after the deal closes, will have a total audience of eight million freelancers, and two million businesses in over 180 countries, and will combine for around $750 in billings this year. 

The two companies are still remaining as separate entities, however, at least for the time being. They will continue to serve their customers from their two current respective platforms, meaning that the accounts and profile records of its users will not be impacted, nor will their profiles or work history. Likewise, clients will still be able to hire, manage and pay exactly as they have done in the past.

So what is behind the idea to merger? The two companies say they want to "revolutionize the way we work," changing the world like Amazon did for retail and iTunes did for music. 

"This merger will create unprecedented freedom for people to find job opportunities regardless of their location, and will allow businesses of all sizes to more easily access the best available talent," oDesk wrote in a blog post on Wednesday. 

That means having more resources to invest in technology, especially on mobile, as well as giving users better quality results by combining their engineering and data science expertise. 

It will also allow the two companies to grow and scale quicker and easier.

As per the merger, oDesk executive chairman Thomas Layton will continue in the same role at the combined company, while Elance CEO Fabio Rosati will serve as chief executive officer. Current oDesk chief executive officer Gary Swart will be acting as a strategic advisor.

“With 2.7 billion people now connected online, people are hungry for more freedom to work flexibly and for teams to come together more easily. The $422 billion global staffing market is ripe for reinvention," Swart said in a statement.

"With online work growing at least ten times more rapidly than staffing overall, oDesk is thrilled to join with Elance in order to innovate faster.”

About oDesk and Elance

The Redwood City, California-based oDesk is the platform upon which the work is conducted, unlike a marketplace, where employers simply post a job and are connected with workers. This allows the employer to make sure that the worker is really doing the work. 

Businesses can choose two types of payment plans: hourly or fixed-price, but oDesk only guarantees that workers will be only be paid for the hours they actually worked on the hourly plan.

The company has over a million registered businesses, and five million freelances. This year, the company reached more than $1 billion of work completed cumulatively via its platform.

Since being founded in 2005, oDesk has raised over $46 million, including $15 million in a Series D round of funding from T. Rowe Price, with participation from Benchmark Capital, Globespan Capital Partners and Sigma Partners in March of last year. 

Meanwhile Elance, which has been around since 1998, has over three million freelancers, and 800,000 businesses, on its platform. It is used in ove 170 countries and more than 1.3 million freelance jobs are posted through Elance every year.

The Mountain View-based company has raised nearly $95 million, most recently grabbing $16 million from Stripes Group with existing investors, New Enterprise Associates and Kleiner Perkins Caufield & Byers, participating in January of 2012.

Elance and oDesk were not available for further comment about the merger. 

(Image source: http://www.getacoder.com)


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