Sequoia Leads $12.5M Funding Round for Thumbtack Local Services Marketplace
It wouldn’t be hard to make a case that finding and hiring the right local service provider at the right price — a personal trainer, a wedding officiant, a babysitter — could be made easier.
Founded in 2009, the marketplace site Thumbtack has been working at this problem for a while. It has a directory of 250,000 U.S. service providers. But last fall, when it changed its payment structure to charge providers for offering a price quote to address a certain user’s request, growth started shooting through the roof.
That’s not to say Thumbtack is huge, yet. The company doesn’t disclose its size, but comScore counted 421,000 U.S. visitors in May. Co-founder and CEO Marco Zappacosta said Thumbtack had $300 million worth of requests in the past year. As the startup doesn’t have a well-known brand (yet), the majority of customers find the site through search, according to Zappacosta.
Meanwhile, esteemed venture capital firm Sequoia Capital makes a very few investments per year — fewer than 15, usually — and almost all of them are Series A. Sequoia partner Bryan Schreier had his eye on Thumbtack for years, and was intrigued to learn that they now have significantly more jobs than competitors like TaskRabbit, Zaarly and RedBeacon.
“What became clear is they’ve gotten to real scale and figured out a business model that really seems to work,” Schreier said in an interview yesterday. “It has the marketplace dynamics of Airbnb and eBay, but there’s this automated service component that’s the magic, and that makes it very differentiated,” he said.
So Schreier and his partnership decided to make a somewhat later-stage bet, and have led the company’s $12.5 million Series B round. Thumbtack had previously raised $5.7 million from Javelin Venture Partners and angels including Scott and Cyan Banister, Joshua Schachter, Jason Calacanis and Ali and Hadi Partovi.
Unlike some other competitors in this space, Thumbtack is particularly broad — it lists almost any sort of local service. However, the site acknowledges that customers use various services differently, and treats them as such. “There’s never going to be an Uber for wedding photography,” noted Zappacosta.