oDesk and Elance Merge to Create One Big Freelancer Company (But Still With Two Brands)
Elance and oDesk said today that they would merge. The companies have a lot in common — they both connect freelancers and gigs online — and they say they have a combined 10 million workers in 180 countries, with $750 million in 2013 billings.
That said, the new merged entity won’t be all that different from the two old ones. Terms of the agreement say both sites will continue to operate under their own independent brands. Pending regulatory approval, the deal is planned to close within four months.
“Our two communities have preferences and unique differences,” said Elance CEO Fabio Rosati. “We will honor the communities and support the two brands. But underneath there are synergies in investments in data science, trust and safety, mobile technology, education and many other things.”
Elance, which is six years older than oDesk, is taking the upper hand of sorts in the deal, with Rosati staying on as CEO of the yet-to-be-named combined company and oDesk CEO Gary Swart becoming a “strategic advisor.” However, by some measures, oDesk is larger; it has a million businesses and 5 million freelancers, compared to 800,000 businesses and 3 million freelancers on Elance.
Over the past couple years, oDesk had also batted around suggestions that it might go public. It had raised $44 million in venture capital, while Elance had raised about double that.
So why merge? Swart noted today that the two competitors have been on panels and met at industry events for years. They are just a few exits off Highway 101 from each other, in Mountain View (Elance) and Redwood City (oDesk). “The more we got together over the past couple years the more we realized that, though competitors, these are decent people,” Swart said. “We’re on the same mission. We’ve made $2 billion combined to date of a $422 billion global staffing opportunity.”
Rosati added, “If we are to become the workplace for the world, we need to make massive investments in technology, massive investments in data science, massive investments in predictable business outcomes. Fundamentally, we have a shot at building a business on the scale of Amazon or LinkedIn or iTunes.”
