110799

Local services marketplace Thumbtack raises $100M

Thumbtack will use the funding to launch a nationwide marketing campaign

Financial trends and news by Steven Loeb
August 20, 2014 | Comments
Short URL: http://vator.tv/n/38bd

(Updated with comment from Jed Katz)

When it comes to finding local services there are plenty of places to look online, including TaskRabbit, Angie's List and Yelp. Even companies like eBay, Amazon and GoDaddy are getting into the space. Frankly, though, its a space that has not seen much innovation or change. Most services operate the same way, with the same search and browsing features.

Thumbtack, though, is attempting to do just that, by upending how people and professionals connect. And now it has $100 million in new funding to put that plan into action, it was announced on Wednesday. The round  was led by Google Capital, with past investors Tiger Global Management, Sequoia Capital, and Javelin Venture Partners all participating.

This new funding comes only months after Thumbtack raised $30 million in May from Sequoia Capital and Tiger Global. This round pushes the company's total funding to $150 million.

So what makes Thumbtack different than all of those other services? By allowing the professionals to come to the customers, instead of the other way around, Marco Zappacosta, founder and CEO of Thumbtack, told me in an interview. Rather than having the customer search and browse through listings, they instead tell Thumbtack what they need. 

So, for example, if someone wants to have their house painted, they would tell Thumbtack all of the details, such as how many rooms are in the house, if they have crown modeling an how the high ceilings are. The company then takes that information to the professionals, who decide if the job is right for them. Once the company has enough potential workers, they will send that info directly to the customer. 

The company caps the number of applicants at five, and the amount of time before they get back to the customer at 24 hours. But the goal is for them to send between three and five applicants within just a few hours. 

"This is a huge time saver for the customer and it allows them to hire with more confidence," Zappacosta said. "As much as it is a benefit to the customer, though, it is also one to professional as well, since customers come directly to their inbox, and there is no advertising, or sponsored listing."

Rather than thinking of the company as a listing service, Zappacosta instead says that it a "matchmaking service."

"We've invested in every round since the Series A, which shows both our confidence in the team and the incredible growth we still see ahead for the company," Jed KatzManaging Director at Javelin Venture Partners, told me. "They're going after an enormous market, and tackling really complex, fascinating engineering challenges to create such a scalable win-win solution for both consumers and service professionals."

The company will use the new funding to build out its employee-base. It current has 60 worker, and plans to add people to its engineering, design, marketing and operations team. 

"We want to hire as many as we can get our hands on," Zappacosta said.

In addition, it will also use the funding to build out its marketing efforts nationwide. That will include two to three cities that are "broadly representatives of United States" and all forms of media, including television.

The obvious precursor to this would be a company like Angie's List, which has had a ubiquitous presence on television for the last few years. 

"It's a great thing for us that a company that solves the same problem, though in a  different way, used television effectively," said Zappacosta. "We now have to figure out right mix for us, and places to invest."

The marketing campaign will begin in earnest next year. 

Founded in 2009, Thumbtack has over three million projects requested every year in over 700 categories, including house paintings, wedding caterings and even people wanting to learn Spanish. At an average price of $600, that is $1.8 billion worth of business being funneled through the site. 

The company operates in all 50 states, and now has 75,000 unique paying professionals as of last month, which just under what Yelp has, and which makes it bigger than Angie's List, according to Zappacosta.

"We are building an Amazon for services. There is not a go-to solution or company for you, as a customer, to solve all of your local services needs, and that is what we are aspiring to build," he said. "That has never existed, and its a huge change."

Thumbtack was the winner of our very first Vator startup competition and event, all the way back in October 2009. 


Related companies, investors and entrepreneurs

14564
Javelin Venture Partners
Angel group/VC
Description: Invests in early-stage tech companies with incredible potential, managed by teams of energetic, trustworthy and capable leaders. Key focu...
8992
TaskRabbit
Startup/Business
Description: TaskRabbit is launched in Boston, San Francisco Bay Area, Los Angeles, Orange County, and is expanding quickly to other major cities
14511
Sequoia Capital
Angel group/VC
Description: Sequoia Capital is a venture capital firm founded by Don Valentine in 1972. The Wall Street Journal has called Sequoia Capital “one...
4473
Thumbtack.com
Startup/Business
Description: Finding a trustworthy local service provider is way too hard. Asking friends and family might net you a recommendation for a babysitter, ...
30232
Jed Katz
Managing Director,
Javelin Venture Part...
Bio: Jed Katz, Managing Director, Javelin Venture Partners One of the pioneers of Internet commerce, Jed has spent his career developing, a...
18297
Marco Zappacosta
CEO,
Thumbtack.com
Bio: I'm a first-time entrepreneur, energized by my team and passionate about our project. And maybe more importantly, I make a mean pesto: th...

Related news


blog comments powered by Disqus