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Startup Spotlight: Thumbtack

Thumbtack are one of the latest unicorn companies, but it wasn't all plain sailing

20Oct

Thumbtack’s cofounders - Marco Zappacosta and Jonathan Swanson - know the difficulties of getting funding more than most.

After being turned down by more than forty VC firms, their persistence was finally rewarded with a $4.5 million round of funding, which allowed them to avoid administration in 2012. Fast-forward three years, and Thumbtack is the latest startup to reach ‘Unicorn’ status - a meteoric rise indicative of the current marketplace.

The company’s aim is to transform local commerce by simplifying how people hire service professionals. Users post a job and wait for the professionals to quote for a task. The model has proven to be scalable too. According to Forbes, Thumbtack now has 200,000 paying customers, compared to 70,000 last year.

Attracting venture capital was just the first hurdle for Thumbtack. The home services market isn’t just home to companies like Angie’s List and Yelp, but is increasingly being targeted by superpowers like Google and Amazon. While their presence validates the perceived opportunity within the market, they are hardly competitors many would relish coming up against, and this was reflected in an interview with Zappacosta in Fortune.

He did, however, point out that despite their relative financial muscle, Amazon and Google didn’t necessarily have an advantage over them. And his confidence is probably as a result of the $1 billion the company have reportedly made for its service people since its inception.

Last year, the company was worth $750 million, but the recent round - headed up by Baillie Gifford - saw the company’s valuation rise to $1.25 billion. The recent injection, according to the New York Times, will be used to implement a new invoicing, payment and scheduling system. Zappacosta stated: ‘We want to be able to help with a project’s entire lifecycle’ in a company blog. This is unlikely to be a new avenue for revenue, but a way for Thumbtack to make its system easier to use.

As things stand, there’s also no IPO on the horizon, something which most companies would at least be considering once they reach Thumbtack’s current valuation. This, perhaps, demonstrates that both Zappacosta and Swanson feel that the company’s product has some ironing out to do before it’s ready for the next stage. And with the current market already fraught with competitors - not to mention in the impending arrival of Amazon and Google - that’s probably a wise move.

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