Thumbtack’s Latest Haul Shows $1.7B Valuation
July 22, 2019 | Contributed by: Neal Polachek
Backed by one of the Valley’s premier VCs – Sequoia Capital – Thumbtack has now raised upwards of $500 million since launching in 2008. Yes, I took a second look, it was 2008. Way back when the gig economy was just emerging and the legacy Yellow Pages business was already deep into its decline.
I think of Thumbtack as sitting between TaskRabbit (acquired in 2017 by IKEA, since most of its tasks probably involved assembling IKEA furniture) at the low end and HomeAdvisor (part of IAC Corp.) at the high end.
According to the news release on the latest raise, the company will use the proceeds to accelerate its growth. We assume this will means a greater emphasis on driving consumers to leverage Thumbtack for finding local service providers via their mobile devices and acquiring more service providers to fulfill consumer demand. Translation. More spending on content strategies to reach “in-market” consumers and providers.
What is more interesting than the raise itself is the clear push to expand the product line. As Marco Zappacosta, co-founder and CEO of Thumbtack stated: “Today’s investment will allow us to accelerate our efforts to create the tools and infrastructure needed to empower small businesses to run and grow their businesses.” The release went on to identify areas of investment to include “offering deeper scheduling and payment integrations.” These are areas we’ve clearly identified as key SMB SaaS initiatives.
Just last week, HomeAdvisor in its State of Home Spending Report released data showing that average spending increased 17% over the prior year. According to the report, “2018 was a robust year for overall consumer spending on home services, with average home improvement spending at $7,560, average home maintenance spending at $1,105, and average home emergency spending at $416 — for an overall total average spending of $9,081 across all categories.”
The challenge, of course, is that given the hot economy and high spending, homeowners are struggling to find quality service providers who are not booked out weeks or even months. This poses some challenges for the marketplaces that offer “leads” as core to their value proposition. Hence Thumbtack’s push into helping service providers operate more efficiently. Finally, we wouldn’t be surprised to see some of this $150 million raise used to acquire SMB SaaS companies with existing customer relationships and related technologies.
One more thing.
I also found it interesting that the lead partner at Sequoia, Bryan Schreier, is also a lead partner for Thanx. Thanx is a company that helps SMBs acknowledge customer loyalty. This weekend I got an offer from Susiecakes — a great regional cake baking company — to celebrate its 13th year in business. I noted that the offer was via the Thanx platform.