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Mayfield and Venrock pour money into local services concierge
Redbeacon, a startup focused on helping consumers find local service providers, just raised $7.4 million in Series A funding from Mayfield and Venrock. Mayfield VC Raj Kapoor and Venrock VC Brian Ascher will go on the Redbeacon board as part of the invesment.
Redbeacon, which launched in 2008, has been an active member of the Vator community, attracting more than 1,000 followers in the high-tech entrepreneur community and becoming among the top vote-getters at Vator Splash February (Vator's quarterly event for startups). See Redbeacon CEO and cofounder Ethan Anderson's recent company update Redbeacon profile on Vator.
The company plans to spend its new capital on expanding into different locations and hiring. Specifically, they're looking for software engineers, UI designers and marketing people.
So, how is Redbeacon different from other sites that help consumers find local service providrers? Beyond Yelp, and certainly the phonebook, Redbeacon allows a consumer to get price quotes and book a servcie right on the Redbeacon platform. This is a service also provided by Thumbtack, which also raised some funding recently.
The difference between other providers and Redbeacon is that Redbeacon is focused on getting a lot of information from the consumer, said Ethan. Basically, Redbeacon acts like a concierge. "We're a decision engine for consumers," said Ethan. "We're focused on helping the consumer finding the best service rather than be a directory."
The way it works is a consumer requests, say a painter, in a specific location. They also provide Redbeacon with details, like what kind of painting job is needed. Redbeacon then looks for service providers in the area and sends out a bid form to them, asking the providers to come back with bids for that specific job. Redbeacon also looks at a number of factors, including ratings on the Better Business Bureau, which of a consumer's friends have used the particular service as well which providers are getting high ratings on Yelp.
Redbeacon gets paid only when a job is booked. It receives 10% of the job. So, if a paint job is $1000. Redbeacon receives $100.
While transactions are minimal, the conversion rates are improving. The percent of jobs getting at least one price quote from local services for our top verticals (maids, handymen, plumbers, electricians, trainers, massage therapists) is 100%, said Ethan.
Currently, Redbeacon has 4,000 service providers registered in the Bay Area. They're focusing on partnering with sites, such as BT (British Telecom), to bring in the service providers.
Redbeacon is an interesting case study. Before raising $7.4 million, the company had raised $150,000 from the founders. Each founder invested $50,000 each. They then went on to win a number of startup competitions. All told, they've won more than $200,000 in services and $75,000 in cash prizes. As Ethan puts it: "If you win significant competitions, then you can actually fund yourself and defray costs."
Here's a recent interview I did with Ethan this spring:
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Thumbtack helps you accomplish the personal projects that are central to your life.
Whether you need to paint your home, learn a new language, or plan your daughter's birthday party, Thumbtack is the easiest and most dependable way to hire the right professional for your projects.
Get started by answering a few questions about your specific needs. Within hours, Thumbtack will introduce you to several available and qualified professionals. Compare custom quotes, reviews, and profiles and hire when you’re ready.
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Thumbtack is available nationwide for more than 700 project categories.
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Redbeacon will find the right business or person to handle any local service need.
Request a service (e.g., gardener, carpet cleaner, dance instructor) and interested local providers will receive your request and respond with their price to do your job at the time and place you need it done.
You can see information about each service provider, how much they'll charge for your job and book your appointment online with the one you like best. Best of all, it's completely free to use!
Redbeacon launched in September 2009 and won the top prize at the 2009 TechCrunch50 Conference.
Whatever you need. Done.
Joined Vator onFormer Founder and CEO of MyTime and Redbeacon (TC50 winner acquired by Home Depot), Product Mgr on Google Video and Google Image Search, Strategy Director at Buy.com and McKinsey & Co consultant.