Dwelling providers platform Thumbtack raises $275M on a $3.2B valuation to double down on dwelling administration – TechCrunch
After taking over the home management startup Setter in December, Thumbtack – one of the pioneers in the gig economy for home services – launched a large round to double the model. The company has raised $ 275 million, money the company plans to use with its network of home service professionals to build a property management and maintenance business. Co-founder and CEO Marco Zappacosta confirmed the round valued Thumbtack at $ 3.2 billion.
In some context, that’s almost double the rating Thumbtack had on its last fundraising, a $ 150 million round led by Sequoia in 2019. It also follows a strong 2020 with sales up more than 50%. Thumbtack’s gross sales (what it pays in service fees, not Thumbtack’s cut) are now well on track to exceed $ 2 billion this year.
This latest funding is being led by the Qatar Investment Authority (QIA), which also includes Blackstone Alternative Asset Management (BAAM) and G Squared. Previous donors Baillie Gifford, CapitalG, Founders Circle Capital, Sequoia Capital and Tiger Global Management also invested.
The funding and shifting focus of the company underscores some of the changes we’ve seen in consumers over the past year.
Because of Covid-19, most of us have stayed at home in large part – which often includes moving to a new home to spend so much more time in – and, as Thumbtack sees it, has a lot more people led to paying more attention to how to make these homes better places and keep them in better shape overall. Partly why it sees a great opportunity – besides being a marketplace for finding professionals for one-off jobs that you may need to do around the home – in providing a “home management” platform to do justice to this new attention.
“It’s pretty wild that people’s homes are their greatest asset, the most complicated thing to be responsible for, but there is no manual,” Zappacosta said in an interview. “When you think about your car, you have to maintain it regularly. Otherwise, you might have to pay a large emergency bill [to fix something]. The same concept applies to the house. But there was never an easy way to know what to do, how much to pay for it, and then just get it done. That’s what we do. “
Services include emergency repairs to electrical systems in the house, as well as preventive maintenance that you may need to do on your property, he said. They do not include contractors to renovate bathrooms or other elective work.
Moving to property management is an interesting twist for another reason too. It’s a sign of how Thumbtack is contributing to a bigger change in the overall use of services: through subscriptions.
That said, while many of us still go shopping or go to the movies every now and then, we all also subscribe to at least one video-on-demand service, many of us may also have Prime accounts in order to enjoy the various benefits of Amazon received, and so on. If we subscribe to everything and everywhere, why not include house maintenance as well?
Thumbtack, now over a decade old, is viewed by many as one of the first steps in the gig economy focusing on home services. However, this has not remained without its challenges. As we reported back in 2019, the last round was a difficult one for the company and it looked like it could come to a flat valuation. That was on the heels of many others in the industry – Thumbtack’s competitors that included not just other startups but heavyweights like Amazon and Google – who fizzled out in their own home services endeavors.
And Covid-19 also proved to be a huge challenge for Thumbtack, which laid off 250 people in March last year.
“Yeah, look, it’s been a year’s roller coaster ride,” Zappacosta said when I asked him about it. “In the early stages of COVID, there was so much fear that many simply switch everything off. People said, ‘I won’t have anyone in my house.’ And so those months were really scary – March, April – because it was unclear how long it would be. And so we made adjustments to make sure we stand the test of time. “
However, that seemed to change later in the year, he continued.
“When people started getting used to masking, and all the precautions, you know, the demand came back. And so in June, July we saw it return to normal levels. And then you know what happened, the big investments we’ve made in the platform over the past few years are to pay off the hiring experience, a lot more e-commerce, really more and more. “
He said 2020 was Thumbtacks’ third year of accelerated growth, “which is kind of surprising given that Covid was in the thick of it. And so [with] the momentum we exert … we’ve never been in a stronger position. “
That also helped to win this last round.
“Thumbtack’s modernization of the home service industry is a boon for both homeowners and home service professionals,” said Bryan Schreier, partner at Sequoia Capital and Thumbtack board member, in a statement. “The biggest obstacle to starting new home projects is headache and anger. By creating a better and easier way for everyone to take care of their home, Thumbtack will open up a huge category and spark new economic activity. “
The company is now focused on where it could best use the technology to gain the upper hand on its platform, which not only competes with other home service marketplaces, but also with a growing number of emerging and established “property management” providers How great, the last month we raised $ 50 million.
An interesting idea that Zappacosta described to me and that could well be part of a later development phase was to offer customers an opportunity to “tour” their homes so that Thumbtack could get a better idea of the room and what would be better observed the property management has to personalize the respective house and the respective user.
That will keep the company in the US, too, instead of expanding internationally. Globally, the home services and repairs market is valued at about $ 500 billion annually, and astonishingly, the US represents a whopping 40% of that value.
